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Unctad - Review of Maritime Transport 2021 - rmt2021 - en
Unctad - Review of Maritime Transport 2021 - rmt2021 - en
REVIEW
OF MARITIME
TRANSPORT
2021
Geneva, 2021
REVIEW OF MARITIME TRANSPORT 2021
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ISBN: 978-92-1-113026-3
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ISSN: 0566-7682
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REVIEW OF MARITIME TRANSPORT 2021
Acknowledgements
The Review of Maritime Transport 2021 was prepared by UNCTAD under the overall guidance of Shamika
N. Sirimanne, Director of the Division on Technology and Logistics of UNCTAD, and under the coordination
of Jan Hoffmann, Head of the Trade Logistics Branch, Division on Technology and Logistics. Regina
Asariotis, Gonzalo Ayala, Mark Assaf, Celine Bacrot, Hassiba Benamara, Dominique Chantrel, Amélie
Cournoyer, Marco Fugazza, Poul Hansen, Jan Hoffmann, Tomasz Kulaga, Anila Premti, Luisa Rodríguez,
Benny Salo, Kamal Tahiri, Hidenobu Tokuda, Pamela Ugaz and Frida Youssef were contributing authors.
The report benefitted from reviews and contributions by officials from the International Maritime
Organization, the International Labour Organization partners of the TrainForTrade Port Management
Programme and the five regional commissions of the United Nations (ECA, ECE, ECLAC, ESCAP, and
ESCWA): Julian Abril Garcia, Peter Adams, Mario Apostolov, Yarob Badr, Jan de Boer, Aicha Cherif,
Ismael Cobos Delgado, Yann Duval, Martina Fontanet Solé, Fouad Ghorra, Fredrik Haag, Robert Lisinge,
Dorota Lost-Sieminska, Ricardo Sanchez, Lynn Tan, Lukasz Wyrowski and Brandt Wagner.
Comments and suggestions from the following reviewers are gratefully acknowledged: Hashim Abbas
Syed, Roar Adland, Stefanos Alexopoulos, Jason Angelopoulos, Tracy Chatman, Trevor Crowe, Neil
Davidson, Juan Manuel Díez Orejas, Mahin Faghfouri, Mike Garrat, Nadia Hasham, Joe Hiney, Julian
Hoffmann Anton, Onno Hoffmeister, Roel Janssens, Lars Jensen, Björn Klippel, Eleni Kontou, Juan
Manuel, Antonis Michail, Turloch Mooney, Richard Morton, Plamen Natzkoff, Jean-Paul Rodrigue, Peter
Sand, Torbjorn Rydbergh, Alastair Stevenson, Stelios Stratidakis, Christa Sys, Antonella Teodoro and
Ruosi Zhang. Experts from the International Chamber of Shipping reviewed chapter 2.
Comments received from UNCTAD divisions as part of the internal peer review process, as well as
comments from the Office of the Secretary-General, are acknowledged with appreciation.
The Review was edited by Peter Stalker. Administrative, editing, and proofreading support was provided
by Wendy Juan. Magali Studer designed the publication, and Juan Carlos Korol did the formatting.
Special thanks are also due to Vladislav Shuvalov for reviewing the publication in full.
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REVIEW OF MARITIME TRANSPORT 2021
TABLE OF CONTENTS
Acknowledgements..............................................................................................................................iii
Abbreviations........................................................................................................................................ix
Note......................................................................................................................................................xii
Overview.............................................................................................................................................xiv
1. International maritime trade and port traffic............................................... 1
A. Volumes of international maritime trade and port traffic....................................................... 3
B. Outlook and longer-term trends........................................................................................ 19
C. Policy considerations and action areas............................................................................. 23
2. Maritime transport and infrastructure........................................................ 29
A. The world fleet................................................................................................................. 31
B. Shipping companies and operations: adapting maritime transport supply
in an uncertain environment ............................................................................................ 42
C. Port services and infrastructure supply............................................................................. 46
D. The Impact of COVID-19 on ports: lessons from the UNCTAD TrainForTrade Port
Management Programme ................................................................................................ 49
E. Summary and policy considerations................................................................................. 54
3. Freight rates, maritime transport costs and their impact on prices......... 57
A. Record-breaking container freight rates ........................................................................... 59
B. Dry bulk freight rates also reach highs.............................................................................. 64
C. Tanker freight rates dip to the lowest levels ever .............................................................. 65
D. Economic impact of high container freight rates, particularly in smaller countries.............. 66
E. Structural determinants of maritime transport costs......................................................... 70
F. Summary and policy considerations................................................................................. 74
Technical Notes................................................................................................................ 78
4. Key performance indicators for ports and the shipping fleet................... 87
A. Port calls and turnaround times........................................................................................ 89
B. Liner shipping connectivity............................................................................................... 93
C. Port cargo handling performance .................................................................................... 99
E. Greenhouse gas emissions by the world fleet................................................................. 105
F. Summary and policy considerations............................................................................... 106
5. The COVID-19 seafarer crisis................................................................... 109
A. Seafarers crisis – recent developments ......................................................................... 111
B. Seafarer crisis – implementation of the ILO Maritime Labour Convention, 2006,
as amended (MLC 2006)................................................................................................ 115
C. Crew changes and key worker status – other relevant international legal instruments..... 117
D. The way forward............................................................................................................ 119
6. Legal and regulatory developments and the facilitation
of maritime trade ..................................................................................... 125
A. Technological developments in the maritime industry .................................................... 127
B. Regulatory developments relating to international shipping, climate change
and other environmental issues...................................................................................... 128
C. Legal and regulatory implications of the COVID-19 pandemic........................................ 133
D. Other legal and regulatory developments affecting transportation................................... 133
E. Maritime transport within the WTO Trade Facilitation Agreement ................................... 135
F. FAL Convention ............................................................................................................. 139
G. ASYCUDA ASYHUB case studies ................................................................................. 141
H. Summary and policy considerations............................................................................... 142
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Tables
1 World fleet by principal vessel type, 2020–2021.................................................................... xvi
2 Five largest seafarer-supplying countries 2021 supplying countries 2021................................ xx
1.1 International maritime trade, 1970–2020...................................................................................3
1.2 International maritime trade 2019–2020, by type of cargo, country group and region...............4
1.3 World economic growth, 2019–2021........................................................................................6
1.4 Growth in the volume of world merchandise trade, 2019–2021................................................7
1.5 Tanker trade, 2019–2020.......................................................................................................11
1.6 Dry bulk trade 2019–2020......................................................................................................12
1.7 Major dry bulk and steel: producers, users, exporters, and importers, 2020...........................13
1.8 Containerized trade on East-West trade routes, 2016–2020...................................................15
1.9 Containerized trade on major East-West trade routes, 2014–2021.........................................15
1.10 World container port throughput by region, 2019–2020..........................................................17
1.11 International maritime trade developments forecasts, 2021–2026...........................................19
2.1 World fleet by principal vessel type, 2020–2021.....................................................................31
2.2 Age distribution of world merchant fleet by vessel type, 2021
and average age 2020–2021..................................................................................................32
2.3 Top 25 ship-owning economies, as of 1 January 2021...........................................................35
2.4 Ownership of the world fleet, ranked by carrying capacity in dead-weight tons, 2021.............36
2.5 Leading flags of registration by dead-weight tonnage, 2021...................................................38
2.6 Leading flags of registration, ranked by value of total tonnage, 2021 (million US dollars)
and principal vessel types.......................................................................................................39
2.7 Deliveries of newbuildings by major vessel types and countries of construction, 2020............39
2.8 Reported tonnage sold for ship recycling by major vessel type
and country of ship recycling, 2020........................................................................................41
2.9 Status of uptake of selected technologies in global shipping, as of 14 June 2021...................42
2.10 Some proposed IMO measures to reduce greenhouse gas emissions....................................43
2.11 World fleet by fuel type as of 1 January 2021..........................................................................45
2.12 Industrial port projects capitalizing on green opportunities to generate
new revenue streams.............................................................................................................48
2.13 Factors affecting the development of smart green ports.........................................................49
2.14 Port Performance Scorecard indicators, 2016–2020..............................................................50
3.1 Contract freight rates, inter-regional, 2018–2020, $ per 40-foot container..............................62
4.1 Time in port, age, and vessel sizes, by vessel type, 2020, world total.....................................90
4.2 Port calls and median time spent in port, container ships, 2020, top 25 countries..................91
4.3 Top 25 ports under the World Bank IHS Markit Container Port Performance Index 2020........99
4.4 Minutes per container move, by range of call size, top 25 countries by port calls..................101
4.5 Cargo and vessel handling performance for dry bulk carriers. Top 30 economies
by vessel arrivals, average values for 2018 to first half of 2021..............................................103
4.6 Cargo and vessel handling performance for tankers. Top 30 countries
by vessel arrivals, average values for 2018 to first half of 2021..............................................104
5.1 Neptune Declaration Crew Change Indicator, July 2021.......................................................113
5.2 Five largest seafarer-supply countries, 2021.........................................................................115
6.1 Key performance indicators of the Kenya Trade Information Portal........................................138
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Figures
1 International maritime trade, world gross domestic product (GDP)
and maritime trade-to-GDP ratio, 2006 to 2021..................................................................... xii
2 Simulated impact of current container freight rate surge on import
and consumer price levels...................................................................................................... xv
3 Median time in port, number of port calls, and maximum vessel sizes,
by country, container ships, 2020..........................................................................................xvii
1.1 International maritime trade, world gross domestic product (GDP)
and maritime trade-to-GDP ratio, 2006 to 2021.......................................................................5
1.2 Participation of developing countries in international maritime trade, selected years..................5
1.3 International maritime trade, by region, 2020............................................................................5
1.4 International maritime trade by cargo type, selected years........................................................8
1.5 International maritime trade in cargo ton-miles, 2001–2021......................................................9
1.6 World capesize dry bulk trade by exporting region in tons and ton-miles, 2019–2020.............10
1.7 World ultra-large tanker trade by exporting region in ton and ton-miles , 2018–2020..............10
1.8 Global containerized trade, 1996–2021..................................................................................14
1.9 Global containerized trade by route, 2020..............................................................................14
1.10 World container port throughput by region, 2019–2020..........................................................18
1.11 Leading 20 global container ports, 2019–2020.......................................................................18
2.1 Annual growth rate of world fleet, dead-weight tonnage, 2000–2020......................................31
2.2 Age distribution of the global fleet, share of the global carrying capacity, 2012–2021..............33
2.3 Age distribution of the fleet, as at beginning of 2021, per development status groups............33
2.4 Share of mega-vessels in the global container ship fleet carrying capacity
by TEU, 2011–2021...............................................................................................................34
2.5 Number of mega-containerships.............................................................................................34
2.6 Mega-vessel distinct journeys through the Panama and Suez canals,
daily averages, from 2012 until 4 June 2021...........................................................................34
2.7 Live and on-order global fleet by ship type..............................................................................37
2.8 Growth of world fleet orderbook, 2012–2021, percentage change
in dead-weight tonnage..........................................................................................................40
2.9 World tonnage on order, selected ship types, 2000–2021......................................................41
2.10 Percentage change in cost intensity by ship segment, average size
and median distance travelled................................................................................................44
2.11 Cargo and revenue, 2016–2020.............................................................................................51
2.12 Average revenue mix of ports, 2016–2020..............................................................................52
3.1 Growth of demand and supply in container shipping, 2007–2021, percentage.......................59
3.2 CCFI composite index, 2011-2021 (quarterly).........................................................................60
3.3 Shanghai Containerized Freight Index weekly spot rates, 1 July 2011 to 30 July 2021,
selected routes ......................................................................................................................60
3.4 New ConTex index, July 2011–July 2021................................................................................63
3.5 Baltic Exchange Dry Index, January 2010–July 2021..............................................................65
3.6 Average weighted earnings all bulkers ($/day), July 2001–July 2021.......................................65
3.7 Average earnings, all tankers, July 2011–July 2021................................................................66
3.8 Simulated impact of current container freight rate surge on import
and consumer price levels......................................................................................................67
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3.9 Simulated impacts of the container freight rate surge on consumer price levels,
by country and by product.....................................................................................................68
3.10 Simulated impacts of container freight rate surges on prices for importers,
consumers and firms, global average.....................................................................................69
3.11 Simulated impact of container freight rate surges on production costs,
by country and size of economy.............................................................................................69
3.12 Simulated dynamic impacts of container freight rate increase on industrial production............70
3.13 Transport costs for importing goods by transport mode, world, LDCs,
and LLDCs, 2016, percentage of FOB value...........................................................................71
3.14 Transport costs heatmap for importing goods, all modes of transport, 2016,
percentage of FOB value........................................................................................................71
3.15 Maritime transport costs for importing goods and distances from trading partners.................72
3.16 Maritime transport costs for importing goods, by country and size of economy......................73
3.17 Impact of structural determinants on maritime transport costs for importing goods................73
3.18 Maritime transport costs by direction of the trade imbalance..................................................74
3.19 Impacts of trade imbalance and trade volume on maritime transport costs.............................74
4.1 Port calls per half year, world total, 2018–2020.......................................................................89
4.2 Port calls per half year, regional totals, 2018–2020.................................................................89
4.3 Container ship port calls and time in port, 2020......................................................................90
4.4 Container ship port calls and maximum ship sizes, 2020........................................................91
4.5 Container ship port calls in Africa and time in port, 2020........................................................92
4.6 Container ship port calls in Africa and maximum ship sizes, 2020...........................................92
4.7 Median time in port, number of port calls, and maximum vessel sizes, per country,
container ships, 2020.............................................................................................................92
4.8 Liner shipping connectivity index, top 10 countries, first quarter 2006
to second quarter 2021..........................................................................................................93
4.9 Port Liner Shipping Connectivity Index, top 10 ports as of second quarter 2021,
first quarter 2006 to second quarter 2021..............................................................................94
4.10 Liner Shipping Connectivity Index, country and port level, 2020..............................................95
4.11 Trends in global container ship deployment, first quarter 2006 to second quarter 2021..........96
4.12 Trends in vessel sizes and number of companies providing services,
selected countries, first quarter 2006 to second quarter 2021................................................97
4.13 Relationship between maximum vessel sizes, deployed capacity, and the number
of companies, second quarter 2021.......................................................................................98
4.14 Liner Shipping Bilateral Connectivity Index (LSBCI) and its components,
first quarter 2006 to second quarter 2021..............................................................................99
4.15 Minutes per container move for container ships, by range of port call size............................100
4.16 Time in port (hours) for container ships, by range of port call size.........................................100
4.17 Correlation between time in port (hours) and minutes per container move, all call sizes.........101
4.18 Correlation between time in port (hours) and minutes per container move,
only calls with 1001 to 1500 containers per call....................................................................101
4.19 Carbon dioxide emissions by vessel type, monthly, million tons, 2011–2021.........................105
4.20 Carbon dioxide emissions by flag state, annual, 2011–2020, million tons.............................106
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Boxes
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ABBREVIATIONS
ECLAC United Nations Economic Commission for Latin America and the Caribbean
ESCAP United Nations Economic Commission for Asia and the Pacific
ESCWA United Nations Economic and Social Commission for Western Asia
EU European Union
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REVIEW OF MARITIME TRANSPORT 2021
GT Gigaton
kw kilowatt
MARPOL
International Convention for the Prevention of Pollution from Ships
Convention
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REVIEW OF MARITIME TRANSPORT 2021
UN/CEFACT The United Nations Centre for Trade Facilitation and Electronic Business
United Nations Office of the High Representative for the Least Developed
UNOHRLLS Countries, Landlocked Developing Countries and Small Island
Developing States
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NOTE
The Review of Maritime Transport is a recurrent publication prepared by the UNCTAD secretariat
since 1968 with the aim of fostering the transparency of maritime markets and analysing relevant
developments. Any factual or editorial corrections that may prove necessary, based on comments made
by Governments, will be reflected in a corrigendum to be issued subsequently.
This edition of the Review covers data and events from January 2020 until June 2021. Where possible,
every effort has been made to reflect more recent developments.
All references to dollars ($) are to United States dollars, unless otherwise stated.
“Ton” means metric ton (1,000 kg) and “mile” means nautical mile, unless otherwise stated.
Because of rounding, details and percentages presented in tables do not necessarily add up to the
totals.
Two dots (..) in a statistical table indicate that data are not available or are not reported separately.
All websites were accessed in September 2021.
The terms “countries” and “economies” refer to countries, territories or areas.
Since 2014, the Review of Maritime Transport does not include printed statistical annexes. UNCTAD
maritime statistics are accessible via the following links:
All datasets: http://stats.unctad.org/maritime
Merchant fleet by flag of registration: http://stats.unctad.org/fleet
Share of the world merchant fleet value by flag of registration: http://stats.unctad.org/vesselvalue_
registration
Merchant fleet by country of ownership: http://stats.unctad.org/fleetownership
Share of the world merchant fleet value by country of beneficial ownership: http://stats.unctad.org/
vesselvalue_ownership
Ship recycling by country: http://stats.unctad.org/shiprecycling
Shipbuilding by country in which built: http://stats.unctad.org/shipbuilding
Seafarer supply: http://stats.unctad.org/seafarersupply
Liner shipping connectivity index: http://stats.unctad.org/lsci
Liner shipping bilateral connectivity index: http://stats.unctad.org/lsbci
Container port throughput: http://stats.unctad.org/teu
Port liner shipping connectivity index: http://stats.unctad.org/plsci
Port call performance (Time spent in ports, vessel age and size), annual: http://stats.unctad.org/
portcalls_detail_a
Port call performance (Time spent in ports, vessel age & size), semi-annual: http://stats.unctad.org/
portcalls_detail_sa
Number of port calls, annual: http://stats.unctad.org/portcalls_number_a
Number of port calls, semi-annual: http://stats.unctad.org/portcalls_number_sa
Seaborne trade: http://stats.unctad.org/seabornetrade
National maritime country profiles: http://unctadstat.unctad.org/CountryProfile/en-GB/index.html
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OVERVIEW
Maritime transport defied the COVID-19 disruption. In 2020, volumes fell less
dramatically than expected and by the end of the year had rebounded, laying
the foundations for a transformation in global supply chains and new maritime
trade patterns
The COVID-19 pandemic disrupted maritime transport, though the outcome was less damaging than
initially feared. The shock in the first half of 2020 caused maritime trade to contract by 3.8 per cent in the
year 2020. But in the second half of the year there was a nascent, if asymmetric, recovery, and by the third
quarter, volumes had returned, for both containerized trade and dry bulk commodities. However, there
has yet to be a full recovery for tanker shipping.
Maritime trade has performed better than expected partly because the COVID-19 pandemic unfolded in
phases and at different speeds, with diverging paths across regions and markets. The rebound in trade
flows was also the result of large stimulus packages, and increased consumer spending on goods, with
a growth in e-commerce, especially in the United States. Later, there was more general optimism in
advanced regions from the rollout of vaccines. But it was also partly due to unlocking pent-up demand for
cars, for example, and to restocking and inventory-building. The rebound was fairly swift because, unlike
the global financial crisis of 2009, the downturn was not synchronized across the world.
In 2021, in tandem with the recovery in merchandise trade and world output, maritime trade is projected
to increase by 4.3 per cent (figure 1).The medium-term outlook also remains positive, though subject to
mounting risks and uncertainties, and moderated in line with projected lower growth in the world economy.
Over the past two decades, compound annual growth in maritime trade has been 2.9 per cent, but over
the period 2022–2026, UNCTAD expects that rate to slow to 2.4 per cent.
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
-1
-2
-3
-4
-5
-6
GDP Maritime trade Maritime trade-to-GDP ratio Average ratio
Source: UNCTAD calculations, based on the Review of Maritime Transport, various issues, data from UNCTADstat and
table 1.1 of the UNCTAD Trade and Development Report 2021. From recovery to resilience: The development dimension.
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Hardest hit has been tanker shipping, but the impact has been less for
containerized trade, gas shipments, and dry bulk commodities
Lockdowns, travel restrictions and production cuts have compressed the demand for fuel. In 2020,
shipments of crude oil, refined petroleum products, and gas together fell by 7.7 per cent. The impact
was less, however, for dry bulk commodity trade: supported by strong demand from China for iron ore
and grain, total dry bulk trade fell by only 1.5 per cent. Containerized trade also resisted, falling by only
1.1 per cent. Global container port throughput fell at a roughly similar rate – and in 2020 totalled 815.6
million twenty-foot equivalent units (TEU).
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– with a blend of reshoring, diversification, replication, and regionalization. Nevertheless, for the near future
China is likely to remain a leading manufacturing site. Automation could make reshoring and nearshoring
more economically viable in the longer term. Hybrid operating models involving just-in-time (i.e., material
moved just before its use in the manufacturing process) and just-in-case (i.e., where companies keep
large inventories to minimize stocks being sold out) supply chain models are likely to emerge. Combined,
these trends will change distances and routes, increasing the need for more flexible shipping services.
They also entail implications for vessel types and sizes, ports of call, and distance travelled.
The pandemic has accelerated pre-existing digitalisation and environmental sustainability trends.
Technological advances have enabled shipping and ports to continue operations while minimizing
interaction and physical contact. New technologies have also stimulated the rise of online commerce
which has transformed consumer shopping habits and spending patterns. The growth in online trade
has increased the demand for distribution facilities and warehousing that are digitally enabled and offer
value-added services. All these developments are expected to generate new business opportunities for
shipping and ports as well as for other players in the maritime supply chain.
Technology will also be critical for advancing environmental sustainability. While designing their stimulus
packages and post-pandemic plans, many governments aim to harness the synergies between technology,
environmental protection, efficiency, and resilience. Businesses and governments recognize that adapting
to the post-pandemic world and building back better requires adding economic, social and environmental
value and creating new business opportunities, not least for maritime transport.
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During the second half of 2020, and into 2021, world trade gradually recovered but supply was less
elastic and constrained by COVID-19 related delays and congestion – leading to a significant increase in
container freight rates.
The future demand/supply balance will also be impacted by regulatory requirements to align shipping
operations with decarbonization targets. Introduced under the auspices of the International Maritime
Organization (IMO), these new regulations will require replacing some of the existing fleet so will entail
significant costs. As well as creating a degree of uncertainty, this could reduce the capital available to
expand the fleet to cater for trade growth.
Cost pressure and soaring rates and surcharges would weigh on smaller
players and prices
Since the second half of 2020 there has been an increase in freight rates. While demand for containerized
goods has been higher than expected, shipping capacity has been constrained by logistical hurdles and
bottlenecks and shortages in container shipping equipment. Unreliable schedules, and port congestion
have also led to a surge in surcharges and fees, including demurrage and detention fees.
These soaring costs are a challenge for all traders and supply chain managers, but especially for smaller
shippers who, compared with the larger players, may be less able to absorb the additional expense and
are at a disadvantage when negotiating rates and booking space on ships. Smaller shippers and low-value
paying cargo may thus find it difficult to secure service contracts and could see their margins eroded.
Freight rates are expected to remain high. Demand is strong and there is growing uncertainty on the supply
side, with concerns about the efficiency of transport systems and port operations. In the face of these cost
pressures and lasting market disruption, it is increasingly important to monitor market behaviour and ensure
transparency when it comes to setting rates, fees, and surcharges. There have been calls for governments to
intervene, and for regulators to apply closer oversight and address unfair market practices.
If sustained, the current surge in container freight rates, will significantly increase both import and consumer
prices. UNCTAD’s simulation model suggests that global import price levels will increase on average by
11 per cent as a result of the freight rate increases (figure 2). Hardest hit will be the small island developing
states (SIDS) who depend for their merchandise imports primarily on maritime transport and who are simulated
to face a cumulative increase of 24 per cent with a time lag of about a year.
Higher container freight rates will also have a sizeable impact on consumer prices. If container freight
rates remain at their current high levels, then in 2023 global consumer prices are projected to be 1.5 per
cent higher than they would have been without the freight rate surge. The impact is expected to be more
significant for smaller economies that depend heavily on imported goods for much of their consumption
needs. In SIDS, the cumulative increase in consumer prices is expected to be 7.5 per cent and in the
Least Developed Countries (LDCs) 2.2 per cent.
Figure 2 Simulated impact of current container freight rate surge on import and consumer
price levels
Sources: Based on data provided by Clarksons Research, Shipping Intelligence Network, the International Monetary Fund,
International Financial Statistics and Direction of Trade Statistics, UNCTADstat, and the World Bank, World Integrated Trade
Solution and Commodity Price Data (The Pink Sheet).
Note: The impact of container freight rate surges on prices is assessed based on a 243 per cent increase in the China
Containerized Freight Composite Index between August 2020 and August 2021. The simulation model assumes that freight
rates in August 2021 will be sustained over the remaining simulation period (September 2021 to December 2023) and all other
factors are held constant over the entire simulation period (August 2020 to December 2023).
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Some goods will be affected more than others by the surge in container freight rates. Most exposed are
goods manufactured through integrated supply chains. Globalized production processes entail a greater
use of shipping, with intermediate goods often crossing borders multiple times within and between
regions. This is the case, for example, for East Asian goods destined for major markets in North America
and Europe. For computers, and electronic and optical products, for example, the consumer price uplift
induced by the current freight rate surge could be 11 per cent.
Higher shipping costs will also affect some low-value-added products: for furniture, for example, and
textiles, garments and leather products, the consumer price uplifts could be ten per cent. These increases
could erode the competitive advantages of smaller economies that produce many of these goods. At the
same time, these countries will find it more difficult to import the high-technology machinery and industrial
materials they need to move up the value chain, diversify their economies and achieve the Sustainable
Development Goals (SDGs).
Even in major economies, lingering high container freight rates and disruption in maritime transport in the
short- to medium-term threaten to undermine recovery. UNCTAD’s analysis concludes that in the United
States and the euro area, for example, a 10 per cent increase in container freight rates could lead to a
cumulative contraction in industrial production of around 1 per cent.
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Figure 3 Median time in port, number of port calls, and maximum vessel sizes, by country,
container ships, 2020
8 days
Maximum vessel
size (TEU)
4 days
1 000
Median time in port
5 000
10 000
2 days
15 000
20 000
1 day
0.50 day
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REVIEW OF MARITIME TRANSPORT 2021
paperless formalities, and the introduction of single-window services – the impetus for which was boosted
during the COVID-19 pandemic.
An example of the use of ICT, is UNCTAD’s Automated System for Customs Data (ASYCUDA) which
involves automation and digitalization in supply chains. A recent development, the ASYHUB solution,
smooths data transfer between ports of departure and arrival – using risk management concepts to help
speed up clearance procedures and avoid goods being stuck in ports unnecessarily.
Another ICT innovation based on UNCTAD technology is the Trade Information Portal (TIP) – a website
in each country that provides traders with easy access to information about trade regulations and
procedures. The UNCTAD TIP offers importers and exporters online, step-by-step guides to trade-related
procedures and also helps the country fulfil its obligations arising from the World Trade Organization Trade
Facilitation Agreement. Today, 29 TIPs, based on UNCTAD technology, are being implemented globally
by UNCTAD and the International Trade Centre. Results have been very positive. TIPs are most advanced
in East Africa, where in Kenya, for example, greater transparency and simplification of a total of 52 trade
procedures so far have reduced the time spent waiting in the queue, at the counter and in between steps
by 110 hours, and the administrative fees for these 52 procedures by $482, i.e., about $11 per trade
procedure on average.
Digitalization allows a paperless environment whereby trade procedures are all carried out online. For the
traders this reduces time and cost and increases transparency and market access, while also reducing
physical contact and the risks of contagion. In addition, smart digital solutions improve public administration
of trade and boost efficiency in export, import and transit operations. Moreover, by minimizing the use of
paper, trade facilitation can also help mitigate climate change.
Reforms in trade facilitation have been promoted by the multilateral trading system, particularly through
the WTO Facilitation Agreement and the IMO Convention on Facilitation of International Maritime Traffic.
These agreements provide common standards and regulations that have proved especially valuable
during the COVID-19 pandemic. By providing governments with guidance and incentives for reforming
trade facilitation, they have paved the way for further digitalization and enhanced transparency, and
for rationalizing administrative formalities. These developments also promote robust public-private
partnerships (PPPs), such as the National Trade Facilitation Committees and Port Community Systems
that involve the business community in port operations. Efficient maritime trade and transport will depend
on aligning and streamlining the mandates and work of the various PPPs.
For the supplying countries seafarers are important sources of income. In 2019, the Philippines, for
example, earned $30.1 billion from its overseas workers – 9.3 per cent of GDP and 7.3 per cent of gross
national income (GNI) – of which $6.5 billion came from its seafarers. In 2020 total remittances fell 0.8 per
cent to $29.9 billion, with those from seafarers falling 2.8 per cent to $6.4 billion.
During the COVID-19 pandemic, seafarers continued to demonstrate great professionalism and dedication,
supporting the delivery of food, medical supplies, fuel, and other essential goods, and helping keep supply
chains active and global commerce running.
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However, hundreds of thousands of seafarers remain stranded at sea. Each month, crews need to be
changed over – to prevent fatigue and comply with international maritime regulations for safety, health
and welfare. Responding to COVID-19, governments closed many borders and imposed lockdowns and
prohibited people from disembarking thus temporarily suspending crew changes. As a consequence,
large numbers of seafarers have been unable to be replaced or repatriated after long tours of duty and had
to extend their service on board. Even over a year into the pandemic, due to these restrictions, and the
shortage of international flights, according to latest estimates by the International Chamber of Shipping,
around 250,000 seafarers remain stranded, far beyond the expiration of their contracts. Yet, there is still
no global consensus on uniform measures to allow for efficient crew changes and transfer.
During the pandemic, stakeholders, including international bodies, governments, and industry, have
issued recommendations and guidance – aiming to ensure that seafarers are healthy and protected
from COVID-19, have access to medical care, and are recognized as key workers and are vaccinated
as a matter of priority, and also that ships and port facilities meet international sanitary requirements.
Nevertheless, as the pandemic continues for a second year, seafarers remain very vulnerable.
With some notable exceptions, only a small proportion of the world’s seafarers have been vaccinated.
Belgium has demonstrated best practice, and July 2021 started a vaccination campaign for all seafarers
arriving in a Belgian port, regardless of nationality.
To address seafarers’ issues there has been a continuous level of cooperation among international
organizations and industry bodies, including IMO, ILO, WHO, UNCTAD, ICS, and ITF, which have repeatedly
expressed concern about the humanitarian crisis in the maritime shipping sector and urged Member
States to designate seafarers and other marine personnel as key workers, accept seafarers’ identity
documents as evidence of their key worker status, and allow flexibility for ship owners and managers to
divert ships to ports where crew change is possible without imposing penalties.
On 1 December 2020, the UN General Assembly unanimously adopted a resolution: International
cooperation to address challenges faced by seafarers as a result of the COVID-19 pandemic to support
global supply chains (A/RES/75/17). This urges Member States to designate seafarers and other
marine personnel as key workers and encourages governments and other stakeholders to implement
the “Industry Recommended Framework of Protocols for ensuring safe ship crew changes and travel
during the Coronavirus (COVID-19) pandemic”. It also calls upon governments to facilitate maritime crew
changes – for example, by enabling them to embark and disembark, expediting travel and repatriation
efforts, and ensuring access to medical care. The resolution also requests IMO, ILO and UNCTAD to
inform the General Assembly at its 76th session on issues related to the resolution.
This follows earlier resolutions from other bodies. On 21 September 2020 the IMO’s Maritime Safety
Committee recommended action to facilitate ship crew change, access to medical care, and seafarer
travel during the COVID-19 pandemic. According to IMO, as of the end of June 2021, 60 Member
States and two Associate Members had signed on to designate seafarers as key workers. Similarly, on
8 December 2020 the Governing Body of the ILO, adopted the “Resolution concerning maritime labour
issues and the COVID-19 pandemic”.
In January 2021, the shipping industry issued the Neptune Declaration on Seafarer Wellbeing and Crew
Change, which by June 2021 had been signed by more than 600 companies and organizations. They
have also produced a Neptune Declaration Crew Change indicator which aggregates data from 10
leading ship managers which collectively have about 90,000 seafarers currently on board. This reported
that between June and July 2021 the situation appeared to be worsening, with more seafarers on
vessels beyond the expiry of their contract and more who had been on board for over 11 months – the
maximum length of time envisaged in the 2006 Maritime Labour Convention (MLC). Since the launch of
the indicator in May 2021, the proportion of seafarers on vessels beyond the expiry of their contract had
risen from 5.8 to 8.8 per cent while the proportion on board for over 11 months had increased from 0.4 to
1.0 per cent.
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Many of the problems are associated with delays in documentation – which should encourage more
commercial parties to adopt secure electronic solutions. Updated industry guidelines adopted recently,
offer useful guidance to shipowners and operators on procedures and actions to maintain the security
of IT systems in their companies and onboard ships, adopting a cyber-risk management approach, and
taking account of the IMO requirements, and other relevant guidelines.
Technological innovation is also raising the prospect of automated crewless vessels. The industry is
conducting trials on “maritime autonomous surface ships” (MASS). The aim is to ensure safe, secure and
environmentally sustainable shipping with the relevant legal framework. In May 2021, the IMO Maritime
Safety Committee completed a regulatory scoping exercise for the use of MASS which highlighted some
priority issues. The outcome could be a MASS instrument/code, with goals, functional requirements and
corresponding regulations, suitable for different degrees of autonomy.
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Technology – Customs officials, port workers, and transport operators increasingly recognize the value of new
technologies and digitalization, not just as a way of boosting efficiency but also for maintaining business continuity
at times of disruption. Technological innovations include advanced analytics, on-board sensors, communications
technology, port-call optimization, blockchains, big data, and autonomous ships and vehicles. During the pandemic,
these technologies have helped reduce physical contact, and keep ships moving, ports open and cross-border trade
flowing. Technological advances have also stimulated consumer spending online and a growth in e-commerce. These
trends will continue to redefine production and consumption patterns and the ways in which ships, ports and their
hinterland connections deliver cargo and services.
Shipping market dynamics – In anticipation of future disruptions, carriers, shippers, ports, and inland transport
operators will be rethinking their business and operating models to respond more flexibly to changing market
conditions. Having seen the way in which the trade rebound stumbled against logistical bottlenecks and constrained
capacity following the COVID-19 shock, they are likely to reconsider their levels of investment in shipping and ports as
well as their planning operations. They can also anticipate potential greater regulation of shipping markets as national
competition authorities step up their monitoring of freight rates and market behaviour and scrutinize rapid movements
in shipping prices.
Decarbonization and the energy transition – Maritime transport is facing growing pressure to decarbonize and
operate in a more sustainable way – issues that have also come to the fore as part of the post-pandemic recovery.
With ongoing IMO work on greenhouse gas emission reduction in shipping providing further momentum, shipping
is expected to change its fuel mix and use new technology and ship designs, alternative fuels and operational
adjustments to cut its carbon and environmental footprint. For energy, shipping is not just a large-scale user but also
a major carrier, so the industry will have to respond to lower demand for oil tankers and coal carriers and more for
ships transporting hydrogen, ammonia and other alternative fuels.
Climate adaptation and resilience – Maritime transport infrastructure and services came under severe stress
as a result of the pandemic and the closure of the Suez Canal. This was in addition to the ongoing dangers of
climate change: over recent years extreme weather events, including floods, hurricanes and cyclones, have been
causing frequent and intense disruptions for both coastal infrastructure and hinterland connections. With current
climate projections pointing to a global warming trajectory exceeding the agreed targets under the Paris Agreement,
the maritime industry and governments need to invest in adaptation and in climate-proofing maritime transport
infrastructure and services, as well as accelerate the development of related legal, policy and technical measures,
and capacity-building.
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xxiv
In 2020, international maritime trade and global supply
chains were hit by the impact of the COVID-19 pandemic.
Overall however, maritime transport managed to navigate
through the crisis, and for some parts of the supply chain
the impact was not as dramatic as initially feared. Carriers
were able to mitigate the early shock and manage lower
levels of demand. Port and landside operations, however,
struggled to adjust, and the world’s seafarers faced
a precarious situation as they became caught up in an
unprecedented global crew-change crisis.
1
trade flowing, by creating supportive macroeconomic and
fiscal conditions while minimizing trade protectionism.
loaded
60%
ged
dischar
World container port traffic by region, 2019-2020
(percentage annual change)
1980
1990
2000
2010
2020
Europe 15
OUTLOOK
Short-term outlook for maritime trade is positive, UNCTAD expects world
however, risks are manifold and uncertainty remains maritime trade to recover
by
+4.3% in 2021
Growth in maritime trade
Covid-19 Uncertainty Congestion volumes expected to
pandemic in ports moderate and expand at an
annual rate of
Around two-thirds of global trade in goods 2016 3 058 3 009 4 228 10 295
takes place in developing countries (figure 1.2). 2017 3 146 3 151 4 419 10 716
As indicated in table 1.2, in 2020, developing 2018 3 201 3 215 4 603 11 019
countries, including the transition economies 2019 3 163 3 218 4 690 11 071
of Asia, accounted for 60 per cent of global
goods loaded (exports) and 70 per cent of 2020 2 918 3 181 4 549 10 648
goods discharged (imports). Much of this Sources: Compiled by the UNCTAD secretariat based on
growth has been in East Asia, especially China, data supplied by reporting countries and as published on
and there has also been a surge in volumes the relevant government and port industry websites, and by
specialist sources. Dry cargo data for 2006 onwards has been
on the Transpacific containerized trade route revised and updated to reflect improved reporting, including
linking East Asia to North America. A smaller more recent figures and a better breakdown by cargo type.
proportion of trade was in developed countries, Since 2006, the breakdown of dry cargo into “Main bulk” and
“Other dry cargo” is based on various issues of the Shipping
which generated 40 per cent of global maritime Review and Outlook and Seaborne Trade Monitor, produced
exports (goods loaded) and 31 per cent of by Clarksons Research. Total maritime trade figures for 2020
imports (goods discharged). are estimated based on preliminary data or on the last year
for which data were available.
Asia’s predominance was further strengthened a Tanker trade includes crude oil, refined petroleum products,
in 2020 as it maintained its 41 per cent gas, and chemicals.
contribution to total goods loaded and increased b
Main bulk includes iron ore, grain, coal, bauxite/alumina,
its contribution to total goods discharged and phosphate. Starting in 2006, “Main bulk” includes iron
ore, grain, and coal only. Data relating to bauxite/alumina and
(table 1.2 and figure 1.3). Developing America phosphate are included under “Other dry cargo”.
and Africa maintained their existing, smaller c
Includes minor bulk commodities, containerized trade, and
shares. residual general cargo.
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REVIEW OF MARITIME TRANSPORT 2021
Table 1.2 International maritime trade 2019–2020, by type of cargo, country group and region
Goods loaded Goods discharged
Other Other
tanker tanker
Year Total Crude oil tradea Dry cargo Total Crude oil tradea Dry cargo
Millions of tons
2019 11 070.5 1 860.3 1 302.6 7 907.6 11 055.1 2 022.8 1 320.5 7 711.8
World
2020 10 648.3 1 716.0 1 202.3 7 730.0 10 631.1 1 863.6 1 222.0 7 545.5
Developed 2019 4 503.2 453.6 477.1 3 572.6 3 778.3 902.0 463.3 2 412.9
economies 2020 4 317.4 425.9 430.3 3 461.2 3 245.2 732.5 370.2 2 142.5
Developing 2019 6 567.3 1 406.7 825.5 4 335.1 7 276.8 1 120.7 857.2 5 298.9
economies 2020 6 330.9 1 290.1 772.0 4 268.8 7 385.9 1 131.2 851.7 5 403.0
2019 814.1 302.8 91.6 419.6 533.7 35.3 113.4 385.0
Africa
2020 735.5 236.1 83.4 415.9 510.1 30.6 107.9 371.5
Latin America 2019 1 406.6 221.9 81.3 1 103.3 621.4 45.0 143.7 432.6
and the
Caribbean 2020 1 369.2 200.5 75.6 1 093.1 590.1 39.6 130.0 420.5
Other Other
tanker tanker
Year Total Crude oil tradea Dry cargo Total Crude oil tradea Dry cargo
Percentage share
2019 100.0 16.8 11.8 71.4 100.0 18.3 11.9 69.8
World
2020 100.0 16.1 11.3 72.6 100.0 17.5 11.5 71.0
Developed 2019 40.7 24.4 36.6 45.2 34.2 44.6 35.1 31.3
economies 2020 40.5 24.8 35.8 44.8 30.5 39.3 30.3 28.4
Developing 2019 59.3 75.6 63.4 54.8 65.8 55.4 64.9 68.7
economies 2020 59.5 75.2 64.2 55.2 69.5 60.7 69.7 71.6
2019 12.4 21.5 11.1 9.7 7.3 3.2 13.2 7.3
Africa
2020 11.6 18.3 10.8 9.7 6.9 2.7 12.7 6.9
Latin America 2019 21.4 15.8 9.8 25.5 8.5 4.0 16.8 8.2
and the
Caribbean 2020 21.6 15.5 9.8 25.6 8.0 3.5 15.3 7.8
Source: Compiled by the UNCTAD secretariat based on data supplied by reporting countries and as published on the relevant
government and port industry websites, and by specialist sources. Dry cargo data for 2006 onwards has been revised and
updated to reflect improved reporting, including more recent figures and a better breakdown by cargo type. Total maritime
trade figures for 2020 are estimated based on preliminary data or on the last year for which data were available.
Note: Since March 2021, the category “transition economies” is no longer used by UNCTAD. Economies formerly classified
as “transition economies” and located in Europe, are reassigned to the “developed regions” grouping, and the economies
formerly classified as “transition economies” and found in Asia, are reassigned to the “developing regions” grouping. For more
extended time series and data before 2020 see UNCTADstat Data Center at https://unctadstat.unctad.org/wds/TableViewer/
tableView.aspx?ReportId=32363. Annual world totals of goods loaded and discharged are not necessarily the same, given
among other factors, bilateral asymmetries in international merchandise trade statistics and the fact that volumes loaded in
one calendar year may reach their port of destination in the next calendar year.
a Include crude oil, refined petroleum products, gas, and chemicals.
4
1. International maritime trade and port traffic
Figure 1.1 International maritime trade, world gross domestic product (GDP)
and maritime trade-to-GDP ratio, 2006 to 2021
(percentage annual change and ratio)
8
7
Average ratio 2006-2014 Average ratio 2015-2021
6
5
4
3
2
1
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
-1
-2
-3
-4
-5
GDP Maritime trade Maritime trade-to-GDP ratio Average ratio
Source: UNCTAD calculations, based on the Review of Maritime Transport, various issues, data from UNCTADstat and
table 1.1 of the UNCTAD Trade and Development Report 2021. From Recovery to Resilience: The Development Dimension.
Figure 1.2 Participation of developing countries in international maritime trade, selected years
(percentage share in total tonnage)
70
60
50
40
30
20
10
0
1970 1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Loaded Discharged
Source: UNCTAD secretariat based on the Review of Maritime Transport, various issues, and table 1.2 of this report.
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REVIEW OF MARITIME TRANSPORT 2021
6
1. International maritime trade and port traffic
Source: UNCTAD Secretariat calculations, based on CPB World Trade Monitor, July 2021. Data source and methodology are
aligned with UNCTAD, Trade and Development Report 2021.
Note: Country coverage and classification in the aggregated country groupings is not comprehensive and relies on
Ebregt (2020).
a
For 2021, figures reflect percentage change between the average for the period January to May 2021 and January to
May 2020.
In 2020 taken together, world merchandise imports and exports fell by 5.4 per cent (table 1.4), This
decline was far lower than more pessimistic forecasts at the height of the pandemic (UNCTAD, 2020a).
In April 2020, the World Trade Organization (WTO) had expected world merchandise trade to drop by
between 13 and 32 per cent in 2020 (WTO, 2020). There was indeed a slump in the second quarter
of 2020 but trade volumes bounced back in the third quarter, responding to the easing of restrictions
and lockdowns and announcements of new vaccines. Along with vaccine rollout in major developed
regions, the rapid return in volumes reflected the resilience of East Asian trade and the boost in consumer
demand from fiscal spending in the United States. Trade in services however remained subdued across
all economies. Tourism and cruise shipping were hit hard, though there was a growth in cross-border
services that were increasingly enabled by digital technologies.
Exports and imports fell in almost all regions – though to different extents. As shown in table 1.4, between 2019
and 2020 developed country regions saw a drop in exports of 6.7 per cent and in imports of 5.6 per cent.
The United Kingdom recorded a double-digit drop in exports, as did the United States though here the
implementation of the Phase One trade agreement boosted some exports to China (Sand, 2020a). Trade
also declined in the euro area and Japan albeit at relatively lower rates while trade involving other developed
regions fared relatively better with exports falling by only 5.1 per cent and imports by 4.5 per cent.
Developing regions also recorded a drop in merchandise trade volumes although at more moderate rates:
exports fell by 2.3 per cent while imports dropped by 5.2 per cent. The one exception was China where,
despite the disruption, exports rose by 1.3 per cent and imports by 1.7 per cent. For Asia, excluding
China, however, exports declined by 3.6 per cent while imports dropped by 11.6 per cent. In Latin America
imports dropped by 11.2 per cent and exports by 4.2 per cent. In Africa and the Middle East exports
fell by 6.8 per cent and imports by 2.8 per cent. In Eastern Europe and Commonwealth of Independent
States, the decline in imports was less at 2.2 per cent, though imports fell by 5.4 per cent.
2021 saw a revival in world merchandise trade. During the first five months of the year exports
were 14.3 per cent higher than in the corresponding period in the previous year, while imports rose
by 13.3 per cent (table 1.4). But the recovery was uneven with exports from Africa and the Middle
East as well as from the United Kingdom continuing their decline. In the United States imports jumped
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REVIEW OF MARITIME TRANSPORT 2021
by 16.0 per cent, reflecting inventory building and the lasting benefits of fiscal support measures. During
the same period, imports increased into the euro area by 11.3 per cent, the United Kingdom by 7.7 per
cent and Japan by 3.7 per cent. Imports into developing countries increased by 15.9 per cent and into
Eastern Europe and Commonwealth of Independent States by 8.8 per cent.
Much of global import demand in the first half of 2021 was met from Asia, in particular from China whose
exports expanded by 34.3 per cent. There was also stronger import growth in Latin America, of 21.0 per
cent. Recovery in Africa and the Middle East was more moderate for both exports and imports. For the
full year 2021, the WTO expects world merchandise trade volume to grow by 8.0 per cent though the
recovery will be uneven (WTO, 2021).
This bounce-back in merchandise trade in almost all major economies has been faster than in previous
recessions – in 2009 and 2015 – though it has been from a low base and has been more robust in
goods than services (UNCTAD, 2021). The rebound was evident across a wide range of sectors including
pharmaceuticals, communications and office equipment, as well as minerals and agri-food. Much of this
has been due to the release of pent-up demand for durable goods such as cars, as well as strong demand
for products that support working from home. In contrast, recovery in the energy sector remains hesitant.
3. Maritime trade fell in 2020 but fared better than initially feared
The sudden dip and subsequent recovery in merchandise trade was reflected in the patterns of maritime
trade. In 2020, the outcome was better than initially feared. Volumes dipped by around 12 per cent in
May 2020 compared with May 2019, but only by around 2.0 per cent in the fourth quarter compared with
the same quarter in 2019 (Clarksons Research, 2021b). For 2020, following a contraction of 3.8 cent,
UNCTAD estimates shipping volumes to have lost 422 million tons.
The performance varied by market segment, with some sectors performing better than others (table 1.1,
table 1.2, figure 1.4). Worst hit was tanker shipping, but there was less impact on containerized trade, gas
shipments, and on dry bulk commodities such as iron ore and grains.
The second half of 2020 saw a nascent recovery – though asymmetric across market segments. There was
a return in volumes for containerized and dry bulk commodities, but tanker shipping awaited a full recovery
in global demand. At the same time, the sudden boost in demand stumbled into shortages – of shipping
capacity, and of containers, and equipment. As result, freight rates surged, with proliferating surcharges.
This may have bolstered shipping profitability but it put supply chains under strain, while adding to port
congestion and increasing delays and dwell times, and leading to a general decline in service reliability.
10
0
1980
1985
1990
1991
1992
1993
1994
1995
2000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
8
1. International maritime trade and port traffic
60 000
50 000
40 000
30 000
20 000
10 000
2020b
2021c
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Main bulka Other dry cargo Container Oil Gas Chemicals
Source: UNCTAD secretariat based on data from Clarksons Research. Shipping Review and Outlook, Spring 2021.
a
Includes iron ore, grain, coal, bauxite/alumina, and phosphate.
b
Estimated.
c
Forecast.
The pandemic has proved to be an asynchronous, multi-wave event, as COVID-19 outbreaks lead to
sequences of lockdowns and various restrictions. In 2020 these disruptions were exacerbated by other
events such as the closure in China of the port of Yantian, which is a critical international container
terminal, and the week-long blockage of the Suez Canal, with further problems in 2021 as a result of
extreme weather events. For some of the major industries in Europe, these bottlenecks are causing
shortages of inputs and delays in delivery, and generally holding up the recovery. Automotive plants, for
example, had to close temporarily due to missing critical components and parts (Ewing and Clark, 2021).
This confluence of factors exposed the vulnerabilities of supply chains and of their underlying maritime
transport systems. They have also amplified the call for nearshoring and reduced the attractiveness of
long-haul trade and extended supply chains.
When adjusted for distance travelled, however, the decline in maritime trade in 2020 was lower – falling
by only 1.7 per cent, to an estimated 58,865 billion cargo ton-miles (figure 1.5). But there were different
outcomes for different types of cargo: oil decreased by 7.0 per cent and containerized trade by 1.5 per
cent, while there was an increase of 1.3 per cent in dry bulk trades (iron ore, coal, and grain) and of 6.7 per
cent in gas shipments, including liquified petroleum gas (LPG) and liquified natural gas (LNG) (Clarksons
Research, 2021a).
International maritime trade flows were sustained in 2020 by the rapid economic rebound in China with a
9 per cent increase in maritime import demand, in particular imports of iron ore and grain. Maritime trade
flows were also supported by China’s exports of containerized goods to the United States. Meanwhile,
lower demand for oil, and cuts by major OPEC+ oil producers and oil production, have continued to keep
a lid on the recovery in tanker shipping.
Most ton-miles and tons generated by bulkers of over 100,000 dwt were contributed by shipments from
Australia, followed by Brazil. In 2020, Australia generated 58 per cent of world iron ore exports and Brazil
23 per cent (figure 1.6). Much of this is destined for China. In 2020, China accounted for 76 per cent of
world iron ore imports and 20 per cent of coal imports. Tonnage on the Australia-China route, however,
declined in 2020, probably as result of the pandemic and the tensions between the two countries. China
is seeking to diversify its sources of supply and is looking more to Africa. Trade in ton-miles generated
by bulkers on the Africa-China route increased in 2020, probably reflecting increased iron ore shipments
from South Africa. Guinea could also be a supplier since it is reported to hold large reserves of untapped
high-quality iron ore. Guinea is expected to start shipping iron ore beginning in 2026, which will boost
demand for dry bulk shipping (Hellenic Shipping News, 2020). The country is already the world’s top
supplier of bauxite, much of which is shipped to China.
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REVIEW OF MARITIME TRANSPORT 2021
Figure 1.6 World capesize dry bulk trade by exporting region in tons
and ton-miles, 2019–2020 (percentage share)
Other
Africa
Europe
North America
Latin America
and the Carribean
(excluding Brazil)
Asia
Brazil
Australia
0 10 20 30 40 50 60
Ton 2020 Ton 2019 Ton-mile 2020 Ton-mile 2019
Source: UNCTAD based on VesselsValue data 2021.
Note: Based on dry bulk vessels of more than 100,000 dwt.
Crude oil exports continue to be dominated by Western Asia (figure 1.7). Much of the world's import
demand is from Asia, mainly China and India, followed by Japan and the Republic of Korea. Ton-mile
increase generated by North American exports in 2020 reflects the strong import demand in China and
growth in exports from the United States captured under Phase One of the trade deal with China. At the
underlying level, the shale boom is also a key driver of North American oil exports, with the United States
becoming a net seaborne energy exporter.
60
50
40
30
20
10
0
Africa Asia Europe Latin America North America Unknown
and the Caribbean
Ton-mile 2018 Ton-mile 2019 Ton-mile 2020 Ton 2018 Ton 2019 Ton 2020
Source: UNCTAD based on VesselsValue data, 2021.
Note: Tanker vessels of more than 320,000 dwt.
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1. International maritime trade and port traffic
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Natural gas is set to contribute a larger share to the global energy mix in the coming years, with much of
the growth driven by shale-gas production in the United States, as well as by production in Western Asia
and in other regions including the Mediterranean and East Africa (Clarksons Research, 2020).
Dry bulk commodity trade defied pressure in 2020 with China keeping
the trade flowing1
Total dry bulk trade fell by an estimated 1.5 per cent in 2020, as volumes slipped to 5.2 billion tons
(table 1.6). China's rapid economic recovery has boosted its import demand so it could take up extra
cargo generated by suppressed demand in other regions. Iron ore trade remained unperturbed as
shipments increased by 3.2 per cent to 1.5 billion tons. Grain trade also held firm, increasing volumes by
7.1 per cent. Supporting factors included a record Brazilian harvest, the returning United States-China
trade, and better prospects in pig farming in China following the recovery from the 2018 African swine
fever outbreak. In 2021, seaborne dry bulk trade is projected to expand by 3.7 per cent, with iron ore and
grain trade growing steadily, a rebound in minor bulk volumes and more coal trade.
Coal trade plunged 9.3 per cent in 2020, partly as a result of the pandemic, with reduced electricity
demand across regions overlaid on the ongoing structural shift towards cleaner energy sources. Minor
bulk trade also came under pressure, though only falling by 2.2. per cent. There was also less trade in
forest products, as well as lower nickel ore exports due to Indonesia's export ban. The bauxite trade was
much stronger, expanding by 8.2 per cent, with China accounting for 77 per cent, and Guinea providing
46 per cent of the supply (Clarksons Research, 2021b).
The current major players in the dry bulk trade are featured in table 1.7. These patterns are likely to
change as a result of tensions between China and Australia which are affecting coal and iron ore trade.
To compensate for the ban on Australian cargo China has cut import duties on coal by land from
Mongolia. This would reduce trade by ship, though the impact could be mitigated by increases on the
Indonesia-China route (Drewry Maritime Research, 2021b). Meanwhile, a shift in Australia's exports away
from China to more distant locations such as Saudi Arabia will increase shipping demand and ton-miles
(Drewry Maritime Research, 2021c).
Recovering from the pandemic on the ‘build back better’ principle will require greener and smarter solutions
and a shift towards cleaner and lower-carbon energy sources. In the longer term this will undermine
demand for dry bulk carriers (Danish Shipping Finance, 2020). Equally, as the Chinese economy becomes
less steel intensive, its demand for iron ore will
flatten. The loss of seaborne trade could, however,
Table 1.6 Dry bulk trade 2019–2020
be partially offset by a growth in trade in the non-
(million tons and
ferrous metals that are essential for producing
percentage change)
renewable technologies – such as nickel ore,
Percentage copper, lithium, cobalt, and bauxite – though these
change
2019 2020 2019–2020 commodities are mostly traded in smaller volumes
(Danish Shipping Finance, 2021).
Main bulka 3 218.0 3 181.0 -1.1%
Trade tensions between China and the United
of which:
States have affected trade in grain. In 2017, the
Iron ore 1 456.0 1 503.0 3.2% United States accounted for 34 per cent of China's
Coal 1 284.0 1 165.0 -9.3% seaborne grain imports. In 2019, this share fell
to 18 per cent, before recovering to 27 per cent
Grain 478.0 512.0 7.1%
in 2020, on the back of the Phase One trade
Minor bulk 2 030.0 1 986.0 -2.2% deal commitments. China’s efforts to diversify its
of which: suppliers have benefited Brazil whose share of the
Steel products 373.0 354.0 -5.1% Chinese market increased from 44 per cent in 2017
to about 60 per cent in 2018 and 2019, before
Forest products 383.0 365.0 -4.7%
falling back to 48 per cent in 2020 (Zhang, 2021).
Total dry bulk 5 248.0 5 167.0 -1.5% Other countries have also gained market share,
including Ukraine, France, the Russian Federation,
Source: UNCTAD secretariat calculations, based on
Clarksons Research, 2019d, Dry Bulk Trade Outlook,
and Argentina. But China’s grain import demand
Volume 26, No. 6, June. also faces ‘downside risks, including a renewed
a
Includes iron ore, coal (steam and coking) and grains outbreak of African swine fever and softer crush
(wheat, coarse grain and soybean). margins that may dampen soybean imports.
1
Detailed figures on dry bulk commodities are derived from Clarksons Research (2021), Seaborne Trade Monitor. Volume 8.
No. 6. June.
12
1. International maritime trade and port traffic
Government fiscal spending Table 1.7 Major dry bulk and steel:
boosts consumption and helps producers, users, exporters,
containerized trade weather the and importers, 2020
(percentage share of
storm world markets)
In 2020, full box trade fell by just 1.1 per cent Steel producers Steel users
to 149 million twenty-foot equivalent units (TEU)
China 56 China 56
(figure 1.8). This was a better outcome than
initially feared and quite an accomplishment India 5 India 6
compared to the 8.4 per cent plunge in 2009 Japan 4 United States 5
following the financial crisis. After the shock in United States 4 Japan 5
early 2020, volumes swiftly returned, as consumer Russian Federation 4 Republic of Korea 4
demand was boosted by stimulus packages and
Republic of Korea 4 Russian Federation 4
measures to support incomes.
Turkey 2 Germany 2
The bounce-back in 2021 reflected easing
Germany 2 Turkey 2
economic impacts and the unlocking of pent-up
demand, as well as restocking and building Brazil 2 Viet Nam 1
inventory. But there was also a shift in consumption Islamic Republic 2 Other 15
of Iran
patterns away from services and towards goods,
notably for health products and pharmaceuticals, Other 15
as well as home office equipment, along with Iron ore exporters Iron ore importers
changes in shopping patterns and the expansion Australia 58 China 76
of ecommerce. The surge in trade was welcome
Brazil 23 Japan 7
but on such a scale that shipping services and port
operations were often unable to keep up, resulting South Africa 5 Europe 6
in logistical bottlenecks. By the end of 2020 and Canada 4 Republic of Korea 5
until the first half of 2021, the whole industry, India 3 Other 6
including shipping, ports, shippers, and inland Sweden 1
carriers struggled with shortages in containers,
Other 6
equipment and shipping capacity. This has added
to port congestion and reduced service levels and Coal exporters Coal importers
reliability, while also increasing freight rates and Indonesia 35 China 20
surcharges (see chapter 3). Australia 31 India 19
Reflecting the rebound in volumes on the Russian Federation 13 Japan 14
eastbound leg of the East Asia-United States trade, United States 5 Republic of Korea 10
the combined share of the East-West trade routes,
South Africa 6 European Union 6
including the Asia-Europe, the Transpacific, and
Colombia 5 Taiwan Province of 6
the Europe-North America (Transatlantic) increased China
marginally in 2020. Together, intra-regional trade,
Canada 2 Malaysia 3
essentially reflecting Intra-Asian flows and South-
South trade, accounted for over 39.5 per cent of Other 3 Other 22
the total. Non-mainlane East-West trade routes Grain exporters Grain importers
(e.g., Eastern Asia-South Asia-Western Asia) and United States 26 East and South Asia 49
North-South routes represented 12.9 per cent
Brazil 23 Africa 14
and 8.0 per cent of the market, respectively.
Argentina 11 South and Central 10
Performance varied across regions and trade America
lanes (table 1.8). In 2020, total volumes on the Ukraine 10 Western Asia 9
mainlane routes decreased by only 0.3 per cent,
European Union 9 European Union 9
as the declines of 2.6 per cent on the Asia-Europe
Russian Federation 7 North America 1
trade lane and of 3.2 per cent on the Transatlantic
lane were partially offset by growth of 2.8 per cent Canada 6 Other 8
on the Transpacific route (table 1.9). Non-mainlane Australia 3
trade fell by 1.6 per cent, reflecting the disruption Other 5
in India which reduced the East-West trade by 3.3
per cent. North-South trade fell by 1.8 per cent, Sources: UNCTAD secretariat, based on data from the World
Steel Association (2021), Clarksons Research Seaborne Trade
while South-South trade contracted by 2.4 per Monitor, Volume 8, No. 6, June 2021; Dry Bulk Trade Outlook,
cent. By early summer of 2020 the rapid recovery Volume 27, No.6, June 2021.
13
REVIEW OF MARITIME TRANSPORT 2021
in Asia had helped the intra-Asian trade rebound, and for the full year the decline was only 0.4 per cent
for intra-regional trade.
2020 saw an increase of 2.8 per cent on the Transpacific route, boosted by a surge in flows from East
Asia to the United States (table 1.9). Between the fourth quarter of 2019 and the first quarter of 2020,
containerized trade from Asia to North America had dropped by 13 per cent, but in the third quarter
of 2020 it jumped by 36 per cent. While container shipping imports to the United States had been rising,
exports from that country had fallen considerably. At the port of Los Angeles, for example, loaded imports
were four times greater than loaded exports – so the return legs often had empty containers, which
created shortages for exporters.
Faced with congestion and long waiting times at ports, stakeholders have looked for alternatives. In
some cases, they have accepted more costly air freight and in others have diverted ships away from the
busiest ports. In the short term, these problems are unlikely to diminish. The latest United States $1.9-trillion
stimulus package should boost consumer spending which, combined with low inventory levels, is expected
to increase imports (Sand, 2021b). In the second quarter of 2021, containerized shipments from East Asia
to North America were 35 per cent higher than in equivalent quarter in 2020 (MDS Transmodal, 2021).
Intra-regional 27.1
South-South 12.4
North-South 8.0
0 5 10 15 20 25 30 35 40 45
Source: UNCTAD secretariat calculations, based on data from MDS Transmodal, World Cargo Database, June 2021.
Note: Non-mainlane East West: Trade involving Western Asia and the Indian Sub-continent, Europe, North America, and
East Asia.
North-South: Trade involving Oceania, Sub-Saharan Africa, Latin America, Europe, and North America.
South-South: Trade involving Oceania, Western Asia, East Asia, Sub-Saharan Africa and Latin America.
Intra-regional: Trade within Europe, Africa, Asia, North America, Latin America and Oceania.
14
1. International maritime trade and port traffic
Source: UNCTAD secretariat calculations, based on data from MDS Transmodal, World Cargo Database, June 2021.
Note: Non-mainlane East West: Trade involving Western Asia and the Indian Sub-continent, Europe, North America, and
East Asia.
North-South: Trade involving Oceania, Sub-Saharan Africa, Latin America, Europe, and North America.
South-South: Trade involving Oceania, Western Asia, East Asia, Sub-Saharan Africa and Latin America.
Intra-regional: Trade within Europe, Africa, Asia, North America, Latin America and Oceania.
Source: UNCTAD, based on MDS Transmodal, World Cargo Database, June 2021.
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REVIEW OF MARITIME TRANSPORT 2021
On other routes, the Asia-Europe trade declined by 2.6 per cent, reflecting reduced demand in
Europe – despite frontloading and inventory building in the United Kingdom ahead of Brexit in 2020.
And transatlantic trade fell by 3.2 per cent, depressed by reduced import demand from Europe,
although solid import demand from North America moderated to 2.4 per cent the fall on the backhaul
journey.
The crunch in container shipping in 2021 revealed many logistical problems, inefficiencies and
vulnerabilities that are threatening the sustainability of the recovery and the competitiveness of supply
chains. In May 2020, global schedule reliability had been 75 per cent, but in May 2021 it was only 39 per
cent and in that month the average delay for late vessels was six days – down from the February peak of
seven days, but still higher than that for most of 2020 (Metroshipping, 2021). At the same time, however,
freight rates and surcharges, and fees, including demurrage and detention fees, had soared, though the
latter rates were inconsistent across ports and carriers (Waters, 2021a).
These problems have been exacerbated by shipping network disruptions. In May 2021, the month-long
closure of the port of Yantian in China increased cargo bottlenecks leading to a backlog affecting the
region’s manufacturing sector and increasing the number of blank sailings causing headaches for shippers
(Port Technology International, 2021a; Waters, 2021b). Although less disruptive, the March 2021 grounding
of the 20,150-TEU containership Ever Given in the Suez Canal blocked the canal, increasing delays for
ships heading for Europe and added to a logistical disruption and port congestion. Some voyages had to
be re-routed around the Cape of Good Hope, adding up to 7,000 miles to the journey – and pushing up
freight and charter rates (Clarksons Research, 2021c).
Carriers argue that they are deploying all available capacity and that the current strain is being triggered
by large and rapid swings in demand, and the surges in trade flows. This is leading to delays in returning
containers and reducing effective capacity, making it difficult to cut delays, rates, and fees, while forcing
carriers to adjust their networks and avoid some ports. They had already been advising customers on the
Transpacific route, for example, that schedule disruptions would lead to blank sailings (Mongelluzzo, 2021a).
As for terminal operators, they blame delays at ports on carriers, noting increases in double-sailings – two
or more vessels sailing within the same week on the same service string or ordered set of ports. Large
peaks and troughs in volumes leading to operational instability have disrupted operations and increased
congestion (Waters, 2021c).
From their perspective, shippers have been looking for alternatives and solutions. Some have resorted
to higher-priced air freight, while on the Far East-Europe route they have also been attracted by rail
transport. According to Chinese customs data, rail volumes and capacity are still relatively small, but the
two-way trade value nearly trebled in the first five months of 2021 (Global Times, 2021). Meanwhile, on
the Transpacific and intra-Asian routes some commodities, such as grain and forestry goods, have seen
a temporary de-containerization with goods despatched on dry bulk ships, adding to the demand for
multipurpose ships and dry bulk carriers (Sand, 2021c).
To secure space on vessels, some shippers are seeking longer-term, multi-year, end-to-end contracts with
carriers. For their part some carriers seek to convert ‘ocean customers’ to long-term ‘end-to-end logistics
customers’. Under these arrangements, shippers have access to logistics services such as warehousing,
customs clearance, visibility, and the ability to speed up or slow down shipments (Knowler, 2021).
Examples include Maersk's aim to become a full-service, end-to-end integrator, and the focus of CMA
CGM and its CEVA Logistics division on creating integrated services (Tirschwell, 2021). In response to
increasing congestion and shrinking ocean capacity Maersk has launched the first block train intermodal
service between Europe and China (Port Technology International, 2021b).
The Global Shippers’ Forum argues that the real crunch point for shippers is the plummeting service
performance and the unpredictability of container delivery, and has renewed its call to remove the consortia
block exemption regulation (Baker, 2021a). It points to the increasing number of blank sailings – ships
skipping a port or ports, or cancelling the entire string – which reduce the number of containers that
shippers can export. This disproportionately affects lower-paying shippers since carriers favour cargo
from higher-paying customers (Waters, 2021c). In this respect, the United States Congress is drafting
legislation to strengthen the Federal Maritime Commission’s oversight of carriers' shipping practices
(Gallagher, 2021).
The Global Shippers Alliance maintains that since no carrier on its own will be able to guarantee
good connectivity and port pairs, the current supply chain crisis is unlikely to be solved by further
regulation of container shipping. Instead it calls on carriers to take more risk, building contingency into
their prices and employing new technology to make supply chain forecasts more accurate and more
16
1. International maritime trade and port traffic
transparent. The best solution, they say, would be to adopt enforceable contracts, which would also
act as hedges against uncertainty and enhance collaboration among shippers, carriers and forwarders
(Baker, 2021b).
Overall, since early 2020, when the pandemic first hit, the narrative for container shipping has thus shifted
dramatically. Carriers have been able to manage ship capacity so as to mitigate initial disruptions but port
and landside businesses required more time to adjust their yard and gate operations which often led to
inefficiencies in terminal operations, such as the management of container stacking (Notteboom, Pallis
and Rodrigue, 2021).
Shippers are caught in this storm and need to better manage their supply chains and adapt to lower
capacity (Drewry Maritime Research, 2021d). They should adopt proactive supply chain strategies
that anticipate delays and promote visibility. While some carriers and ports (e.g., Maersk and DP
World) are emerging as end-to-end integrators, they should spare no effort to address congestion
and service reliability and ensure that maritime trade is not undermined by the current logistical
hurdles.
Meanwhile in mid-2021 pressure in container shipping continued unabated, with shippers increasingly
worrying about the reliability of services and their ability to secure space for their shipments. On 9 July 2021,
the President of the United States signed an executive order that encourages the United States Federal
Maritime Commission “to ensure vigorous enforcement against shippers charging American exporters
exorbitant charges” (Holt, 2021). Since then, Federal maritime regulators have ordered eight container
lines to provide details showing how congestion port surcharges meet legal and regulatory requirements
(Szakonyi, 2021).
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REVIEW OF MARITIME TRANSPORT 2021
Oceania
North America
Europe
Latin America
and the Caribbean
Africa
Asia
0 10 20 30 40 50 60 70
2020 2019
Source: UNCTAD secretariat calculations, derived from table 1.10.
Singapore
Ningbo-Zhoushan
Shenzhen
Guangzhou
Qingdao
Busan
Tianjin
Hong Kong
Rotterdam
Dubai
Klang
Antwerp
Xiamen
Tanjung Pelepas
Kaohsiung
Los Angeles
Hamburg
Long Beach
New York
Million TEU 2019 - left axis Million TEU 2020 left axis Percentage change 2019-2020 – right axis
Source: UNCTAD based on data published on Hamburg Port Authority website (www.hafen-hamburg.de/en/statistics/top-
20-container-ports), accessed July 2021.
Nearly all leading Chinese ports increased their throughput. Shanghai saw slow growth but remained the
world’s leading port, while growth in Tianjin was 6.4 per cent and Qingdao 4.8 per cent. In Europe and
North America port performance varied. Outside this group, the fall in throughput in Colombo was caused
by pandemic-induced labour shortages and limited capacity on mainline vessels. Beirut continued to lose
traffic to Tripoli following the 2020 port explosion (Drewry Maritime Research, 2021f).
New York (+1.3 per cent) and Antwerp (+0.8 per cent) have been more resilient, while Kaohsiung
(-7.7 per cent) and Hamburg (-6.5 per cent) were severely hit. Others such the ports of Dubai (-4.3 per cent),
Rotterdam (-3.4 per cent), Klang (-2.9 per cent), and Busan (-0.9 per cent), recorded drops in volumes
handled.
The COVID-19 pandemic was a big disruptor that has created challenges but also opportunities for
the sector. Digitalization and environmental sustainability have become key pillars of the post-pandemic
recovery. Industry and governments are considering opportunities that may arise from ‘building back
better’. For example, in 2021 COSCO Shipping Ports launched a green finance framework to drive green
18
1. International maritime trade and port traffic
and smart port development (Greenport, 2021a). Elsewhere, the European Union granted €25 million to
a consortium led by the Port of Rotterdam to run pilot projects on sustainable and smart logistics. Project
partners will also design and implement digitalization and automation solutions for the energy transition
(Greenport, 2021b). Meanwhile, the United States’ $1.9-trillion spending plan includes funds earmarked
for transport infrastructure and resilience, including ports (Port Strategy, 2021).
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REVIEW OF MARITIME TRANSPORT 2021
20
1. International maritime trade and port traffic
of production that reflect maturing value chains in China and the United States. The hyper-globalization
of the late-1990s and early-2000s appears to be decelerating. Enterprises, particularly in automotive,
computer and electronics industries, are aiming to locate production closer to demand and consumption
markets. Developing countries are increasingly consuming their own products and reducing their imports
of intermediate goods while creating more comprehensive domestic supply chains (UNCTAD, 2019).
Decisions will also be shaped by recent episodes of shipping network disruption (Suez Canal blockage,
surge in COVID-19 cases in South China), chip shortages that close car manufacturing, shipping delays
and soaring costs. Existing shifts in globalization patterns can be expected to accelerate (Yap and
Huan, 2018).
Some countries are also aiming for greater self-reliance particularly in goods considered to be strategically
valuable, such as pharmaceuticals and medical equipment, and new technology (Fitch Solutions, 2020).
This is illustrated by initiatives such as Made in China 2025, Buy American, Strategic Autonomy in Europe,
and Self-sufficient India – as well as incentives to move supply chains closer to home in Japan, the
Republic of Korea and Taiwan Province of China.
In the United States, the new administration has already indicated its intention to build supply chains that
rely less on China for strategically important products (Wood and Helfgott, 2021). And in China the recent
14th Five-Year Plan is expected to boost domestic consumption and expand the domestic market for
China's manufactured goods. It also seeks to achieve technological self-sufficiency and expand exports
(Fitch Solutions, 2021). Overall, the plan is expected to benefit shipping while promoting energy, grains,
minor bulk commodities, and chemicals imports.
While the pandemic could deepen pre-existing changes to globalization patterns, it has also reaffirmed
China's important role in sustaining international trade. With around one-third of global trade, China is
showing the resilience and determination to remain the ‘factory of the world’. West and South Asia, South
America, Western Europe and the Mediterranean regions recorded export growth in the fourth quarter
of 2020, although of a lower scale (Teodoro, 2021).
Since 2018 the United States has increased tariffs, but rather than inducing a return of production to the
United States this tended to shift manufacturing within Asia. In 2020 Cambodia, for example, took over a
large part of China's market share in United States imports of Christmas lights. During the same period,
exports of bikes to the United States from Cambodia jumped by 478 per cent and from Taiwan Province
of China by 30 per cent. Tariffs have not provoked a large-scale nearshoring and have had little impact
on ton-miles as containerized exports from China or neighbouring East Asian countries hardly affect the
distances travelled to the United States (Sand, 2020b).
Nevertheless, while China continues to lead world exports its predominance can be expected to moderate
as its economy matures and relies more on domestic than external demand. This implies that imports in
value terms are likely to increase faster than exports (Nicita and Razo, 2021), suggesting potential shifts in
shipping patterns and trade, and changes in maritime transport demand.
Nevertheless an outright reversal of globalization will be difficult. Global supply chains are the product
of years of investment, relationship-building, and knowledge acquisition, and China's large production
and logistical capacity and economies of scale are difficult to replace. This was demonstrated by the
increased imports of electronics in 2020, which triggered a shift of some production and sourcing back
to China. And while imports of machinery and electrical equipment, and computers from Mexico may
have increased over recent years, often components are exported from China to Mexico for assembly in
manufacturing facilities near the United States border (Cassidy, 2021a).
It may be fairly straightforward to change labour-intensive and low-value supply chains. Apparel and
textiles, for example, are already moving away from China to Bangladesh, Viet Nam, and Ethiopia. Turkey
is also a major producer of clothing, shipping goods to Europe. But it is more complex for mid- and
high-value-added manufacturing. For semiconductors, for example, one study estimated that only 9
to 19 per cent of trade flows could potentially shift. For car exports the estimate was 15 to 20 per cent
though for pharmaceuticals it was 38 to 60 per cent (Lund et al., 2020).
Some companies are nevertheless aiming to diversify production sites, with a ‘China +1’ strategy
and will continue to look for alternative sources which will require adjusting networks and inventory
management strategies and transport and shipping routes. This is resulting in new trade flows as
observed in the case of China-Mexico-United States, or from other countries in East Asia to the United
States. Morocco, and Central and Eastern Europe can be expected to strengthen their position as
new suppliers to the North American and European consumer market, for cars, electronics, and heavy
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REVIEW OF MARITIME TRANSPORT 2021
machinery (Fitch Solutions, 2020). In the long term, automation could make reshoring and nearshoring
more economically viable.
The pandemic and its fallout are likely to hasten this transition, but the outcome will likely be a blended
approach, balancing localized and global sourcing depending on product and geography (UNCTAD, 2021c).
These trends have major implications for maritime transport, as carriers need to redefine distances and
routes and offer more flexible shipping services. A reconfiguration of supply chains has implications for
vessels, sizes, ports of call, and distance travelled.
22
1. International maritime trade and port traffic
companies have recently invested in other parts of the supply chain, including warehousing, aircraft, and
distribution (Steer and Dempsey, 2021).
Acceleration in digitalization
Port authorities, shippers, and freight forwarders that had invested in digital infrastructure and
connectivity and promoted data exchange navigated more smoothly through the COVID-19 disruption
(Schewerdtfeger, 2021a). But this also widened the digital divide between developed and developing
regions. Countries that were less advanced were less able to mitigate the pandemic and diversify their
economies.
UNCTAD expects the fast shift towards digitalization to strengthen the market positions of a few digital
mega platforms. If left unaddressed, the yawning gap between under-connected and hyper-digitalized
countries will widen, exacerbating inequalities (UNCTAD, 2020b).
Investing in digital infrastructure is crucial for information sharing and effective resource planning.
Automation and smart technologies, including artificial intelligence, can solve many of the challenges
faced by the industry, such as how to process more cargo in an environmentally friendly manner
(Schewerdtfeger, 2021c). Developing countries should be supported in their efforts to implement digital
tools to advance environmental sustainability, economic efficiency, and resilience.
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REVIEW OF MARITIME TRANSPORT 2021
and between the hyperconnected and weakly connected. Closing the gap is important and could
form part of relevant post-pandemic recovery plans and other support measures.
• Facilitate trade – The wheels of trade and shipping kept the world going when the pandemic hit
and helped lift the world economy. Going forward, trade should be further enabled by adopting
supportive policy measures that minimize trade restrictiveness and protectionist tendencies.
• Fiscal support – Carefully time the winding up and withdrawal of fiscal support measures, to avoid a
premature withdrawal that stifles the nascent recovery. For most developing countries where fiscal
measures similar to those in developed regions could not be deployed, international cooperation
and targeted aids are becoming crucial.
• Stakeholder collaboration – Stakeholders in the maritime supply chain, including carriers, ports,
inland transport providers and shippers, should work together to ensure that maritime transport
remains a reliable, predictable, and efficient mode of transport that links supply chains and enables
trade. And to ensure visibility and transparency they should ensure enhanced communications, and
sharing of data and information.
• Ecommerce – Shipping and ports should explore the business opportunities arising from growth
in ecommerce, accelerated digitalization and the growing environmental sustainability imperative,
and take these opportunities to promote profitability while also providing quality services that meet
customer and supply chain requirements.
• Sustainability – Expand efforts to promote environmental sustainability as part of the various
stimulus packages and post-pandemic recovery plans. Support for decarbonization under the IMO
framework should not waver, while ensuring that the implications for developing countries are well
understood.
• Energy transition – Promote investment in fleets, technologies, and infrastructure, including ports
and hinterland connections, to support a maritime supply chain energy transition and environmental
sustainability.
• Resilience building and future proofing – Prioritize preparedness, risk management, digitalization,
environmental sustainability, and improving data and forecasting. End-to-end visibility will increase
resilience while enhancing efficiency and productivity gains. A portfolio of measures can improve
resilience including redundancy across suppliers, dual-sourcing, backing up production sites, and
managing inventory, and stocks, along with risk management, and end-to-end transparency. Hybrid
solutions can also be envisaged, involving extended supply chains with an element of nearshoring
and reshoring.
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1. International maritime trade and port traffic
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27
2
This chapter reviews the supply of maritime transport,
covering the world fleet, shipping companies, and port
services, and then adding insights from the UNCTAD
TrainForTrade Port Management Programme.
Adapting maritime transport supply Potential changes from the Green Transition
Use of
different
Ship travel types
distance of vessels
Scaling up investment
to expand the fleet
Maritime
Ship costs logistics
Retrofitting or replacing
costs
the existing fleet
Financial performance
Congestion
The age distribution varies, however, between General cargo ships 76 893 76 754 -0.18%
different economies (figure 2.3). The oldest 3.71% 3.60%
ships are generally those in the least developed World total 2 071 638 2 134 640 3.04%
countries (LDCs), where close to 30 per cent
Source: UNCTAD calculations, based on data from Clarksons
are more than 20 years old. Compared to the Research.
developing group, or the developed countries, Notes: Propelled seagoing merchant vessels of 100 gross
the LDCs also have a higher proportion of ships tons and above, at 1 January.
of 15 to 19 years old. Dead-weight tons for individual vessels have been estimated.
Figure 2.1 Annual growth rate of world fleet, dead-weight tonnage, 2000–2020
(percentage)
12
11.1
10
8.4
8.0
8 7.2 7.0
6.7
6.3 6.3
Percentage
6
5.1
3.7 4.1
4 3.5 3.7
3.3 3.1 2.7 3.0
2.6
2.4 2.4
2 1.1
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
31
REVIEW OF MARITIME TRANSPORT 2021
World
Bulk Percentage of total ships 18 37 24 10 10 10.6 10.2
carriers
Percentage of dead-weight tonnage 22 40 23 9 6 9.5 9.3
Average vessel size (dead-weight tonnage) 90 447 78 409 68 583 68 087 46 623 NA NA
Container Percentage of total ships 14 19.21 32 17 17 13.2 12.7
ships
Percentage of dead-weight tonnage 20 29 29 14 7 10.4 9.9
Average vessel size (dead-weight tonnage) 74 632 78 802 46 897 42 345 21 975 NA NA
General Percentage of total ships 5 10 16 9 59 27.1 26.3
cargo
Percentage of dead-weight tonnage 8 20 23 10 40 19.9 19.3
Average vessel size (dead-weight tonnage) 5 992 7 493 5 494 4 372 2 660 NA NA
Oil tankers Percentage of total ships 14 17 21 13 35 19.5 19
Percentage of dead-weight tonnage 25 21 28 19 8. 10.9 10.4
Average vessel size (dead-weight tonnage) 96 122 65 148 72 208 80 802 12 346 NA NA
Other Percentage of total ships 10 17 17 9 47 23.6 23.0
types of
ships Percentage of dead-weight tonnage 20 16 23 11 30 16.1 15.8
Average vessel size (dead-weight tonnage) 9 236 4 562 6 524 5 953 3 014 NA NA
All ships Percentage of total ships 11 18 19 10 42 21.6 21.1
Percentage of dead-weight tonnage 22 29 25 13 11 11.2 10.80
Average vessel size (dead-weight tonnage) 43 364 34 175 28 112 27 809 5 505 NA NA
Developing economies (all ships)
Percentage of total ships 10 20 19 10 41 20.8 20.2
Percentage of dead-weight tonnage 21 29 22 13 15 11.9 11.6
Average vessel size (dead-weight tonnage) 33 788 24 295 18 871 21 144 6 190 NA NA
Developed economies (all ships)
Percentage of total ships 12 17 20 10 40 21.3 20.8
Percentage of dead-weight tonnage 23 30 28 13 7 10.5 10.2
Average vessel size (dead-weight tonnage) 54 908 50 000 39 696 35 466 5 132 NA NA
Small Islands Developing States (all ships)
Percentage of total ships 6 8 10 8 68 30.9 30.3
Percentage of dead-weight tonnage 3 30 18 20 30 17.5 17.8
Average vessel size (dead-weight tonnage) 2 009 16 865 8 077 11 326 2 036 NA NA
Least developed countries (all ships)
Percentage of total ships 12 13 8 6 61 28.6 28.6
Percentage of dead-weight tonnage 9 19 25 18 29 17.0 16.5
Average vessel size (dead-weight tonnage) 7 551 15 032 33 414 31 782 4 956 NA NA
32
2. Maritime transport and infrastructure
Figure 2.2 Age distribution of the global fleet, share of the global carrying capacity,
2012–2021
45
40
Percentage of dead-weight tonnage
35
30 5-9 years
25 10-14 years
0-4 years
20
15-19 years
15
20+ years
10
5
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing merchant vessels of 100 gross tons and above; beginning-of-year figures.
Figure 2.3 Age distribution of the fleet, as at beginning of 2021, per development status
groups
35
30
0-4 years
25 5-9 years
Percentage
20 10-14 years
15 15-19 years
10 20+ years
0
Developed economies Developing economies Small island Least developed countries
developing states
Source: UNCTAD calculations, based on data from Clarksons Research.
Note: The LDC and SIDS country grouping are based on the definition by UNOHRLLS. For more information see:
https://www.un.org/ohrlls/content/ldc-category and https://www.un.org/ohrlls/content/list-sids.
Increasing ship sizes: what we have learnt from the Ever Given incident
Since the early 2000s, more of the world’s cargo has been carried in mega-container ships – those with a
container capacity greater than 10,000 twenty-foot equivalent units (TEU): between 2011 and 2021 their
proportion of carrying capacity rose from 6 to almost 40 per cent (figure 2.4). In the last 10 years, there
have been 97 new ships of between 15,000 and 19,990 TEU, and since 2018 74 ships of 20,000 TEU and
above (figure 2.5). These larger ships, facilitated by technological advances, have been part of broader
corporate strategies to pursue economies of scale (Sanchez, 2021). However, this has resulted in excess
supply – ‘over-tonnaging’ – in the world’s major liner routes, with greater pressure on infrastructure and
on logistics at ports.
This pressure on infrastructure was dramatically illustrated from 23 to 29 March 2021 when the Suez Canal
was blocked by the Ever Given, a container ship with a carrying capacity of 20,000 TEU. Larger ships
are more difficult to steer, and harder and more costly to rescue in cases of collisions and groundings.
In addition to safety and salvage issues, the higher risks entail higher insurance costs. (Hayden, 2015;
Lockton, 2019; Allianz, 2019; and Boulougouris, 2021).
This is a critical issue for key nodes of the global maritime transport network such as the Suez and
Panama canals, which have constrained capacities and where any disruption sends shockwaves through
global supply chains. The Ever Given incident delayed the passage of hundreds of vessels through the
canal, disrupted global trade, and exacerbated the shortage of shipping containers, leading to congestion
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REVIEW OF MARITIME TRANSPORT 2021
in many ports and an increase in container freight rates (Hellenic Shipping News, 2021). As indicated in
figure 2.6, since 2012 these mega-vessels have been making more journeys through the Panama and
Suez canals.
Figure 2.4 Share of mega-vessels in the global container ship fleet carrying capacity
by TEU, 2011–2021
(percentage)
100
90
80
70
60 Less than
10,000 TEU
50
40 Megavessels
30 (more than
20 10,000 TEU)
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: UNCTAD calculations, based on data from Clarksons Research.
250
200
150
100 15,000 - 19,999 TEU
Figure 2.6 Mega-vessel distinct journeys through the Panama and Suez canals,
daily averages, from 2012 until 4 June 2021
25
Daily average of distinct journeys
20
15
10
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Panama Canal Suez Canal
Source: UNCTAD calculations, based on data from VesselsValue.
Notes: In the case of the Panama Canal the mega-vessel category includes bulk carriers (Capesize), containerships (Neo-Panamax
and Post Panamax), gas carriers (Q Flex and VLGC) and oil tankers (VLCC). In the case of the Suez Canal, in addition to the ship
types mentioned before, the mega-vessel category includes an additional type of gas carrier (Q-Max) and containership (ULCV).
34
2. Maritime transport and infrastructure
1 Japan 39 564 15 101 4 746 9 529 3 236 15 436 3 130 5 203 7 888 103 833
2 Greece 39 853 11 670 197 32 602 2 512 14 572 182 977 402 102 968
3 China 34 735 20 632 9 967 12 838 4 979 4 115 5 120 3 344 3 207 98 936
4 United States 3 734 1 938 15 494 5 117 51 259 1 454 1 320 1 098 791 82 206
5 Singapore 14 564 9 274 4 304 12 569 32 4 377 870 4 778 534 51 301
6 Norway 4 384 2 514 21 748 5 570 3 208 7 620 900 2 433 2 719 51 096
7 Germany 6 207 24 166 687 1 767 9 460 1 627 2 789 704 347 47 754
8 United Kingdom 4 001 7 123 10 064 3 829 5 661 5 816 791 1 354 2 239 40 878
9 China, Hong Kong SAR 11 117 12 982 73 6 288 2 387 1 114 918 269 886 36 032
10 Republic of Korea 9 123 5 363 240 5 558 433 4 791 680 1 480 2 673 30 340
12 Denmark 1 526 12 847 1 701 3 416 1 032 2 049 751 1 032 108 24 462
13 Switzerland 822 9 012 3 056 596 9 521 213 183 169 12 23 584
14 Netherlands 704 412 13 273 441 526 686 2 969 1 892 2 046 22 949
15 Taiwan Province 8 145 7 372 48 1 483 74 363 563 148 107 18 304
of China
16 Italy 1 116 6 2 441 1 866 9 475 256 1 801 418 621 18 000
19 France 374 5 325 5 183 112 1 860 476 155 132 144 13 761
20 Russian Federation 256 110 1 346 3 320 76 1 740 1 449 637 1 828 10 762
21 Turkey 3 406 1 011 677 1 269 353 131 1 793 1 156 51 9 847
22 Indonesia 1 110 1 103 1 137 2 131 2 020 565 1 174 369 51 9 659
23 Malaysia 142 110 6 748 219 19 1 811 189 150 159 9 548
24 Belgium 1 747 491 134 3 305 860 761 210 2 018 9 526
25 United Arab Emirates 1 959 469 2 858 2 361 57 544 90 621 179 9 138
Others 14 436 4 971 23 462 18 470 12 008 13 971 7 863 4 050 2 297 101 529
World total 212 455 158 771 149 093 147 764 120 282 96 110 36 470 33 026 31 384 985 356
Source: UNCTAD calculations, based on data from Clarksons Research, as of 1 January 2021 (estimated current value).
Note: Value is estimated for all commercial ships of 1,000 gross tons and above.
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REVIEW OF MARITIME TRANSPORT 2021
Table 2.4 Ownership of the world fleet, ranked by carrying capacity in dead-weight tons, 2021
Number of vessels Deadweight tonnage
Foreign
flag as a Total as a
Country or territory of National Foreign percentage percentage
ownership flag flag Total National flag Foreign flag Total of total of world
1 Greece 642 4 063 4 705 58 067 003 315 350 152 373 417 155 84.45% 17.64%
2 China 4 887 2 431 7 318 105 657 323 138 898 420 244 555 743 56.80% 11.56%
3 Japan 914 3 115 4 029 35 107 223 206 741 103 241 848 326 85.48% 11.43%
4 Singapore 1 459 1 384 2 843 73 258 302 65 805 758 139 064 059 47.32% 6.57%
5 China, Hong Kong SAR 886 878 1 764 72 367 151 31 851 549 104 218 700 30.56% 4.92%
6 Germany 198 2 197 2 395 7 437 473 78 759 307 86 196 779 91.37% 4.07%
7 Republic of Korea 787 854 1 641 15 096 916 70 995 920 86 092 836 82.46% 4.07%
8 Norway 387 1 655 2 042 1 899 017 62 144 480 64 043 497 97.03% 3.03%
9 Bermuda 13 540 553 300 925 63 733 226 64 034 151 99.53% 3.03%
10 United Kingdom 309 1 014 1 323 7 160 493 46 524 174 53 684 667 86.66% 2.54%
(excl. Channel Islands)
11 United States of America 790 1 020 1 810 10 395 172 44 576 019 54 971 191 81.09% 2.60%
(incl. Puerto Rico but
excluding Virgin Islands)
12 Taiwan Province of China 147 867 1 014 6 998 235 46 284 542 53 282 777 86.87% 2.52%
13 Monaco 0 478 478 0 43 426 478 43 426 478 100.00% 2.05%
14 Denmark 26 902 928 47 415 42 185 673 42 233 088 99.89% 2.00%
15 Belgium 108 249 357 8 974 783 21 969 171 30 943 954 71.00% 1.46%
16 Turkey 429 1 112 1 541 5 994 812 21 970 706 27 965 518 78.56% 1.32%
17 Indonesia 2 232 89 2 321 24 139 035 2 704 715 26 843 751 10.08% 1.27%
18 Switzerland 18 396 414 928 432 25 794 797 26 723 229 96.53% 1.26%
19 India 875 195 1 070 16 396 087 10 013 434 26 409 521 37.92% 1.25%
20 United Arab Emirates 119 941 1 060 525 959 24 431 420 24 957 380 97.89% 1.18%
21 Russian Federation 1 464 322 1 786 9 184 626 14 682 694 23 867 320 61.52% 1.13%
22 Iran (Islamic Republic of) 246 8 254 18 898 257 352 889 19 251 146 1.83% 0.91%
23 Netherlands 692 515 1 207 5 577 088 13 185 003 18 762 090 70.27% 0.89%
24 Saudi Arabia 151 111 262 13 397 363 3 422 203 16 819 566 20.35% 0.79%
25 Italy 481 170 651 10 296 714 5 900 509 16 197 223 36.43% 0.77%
26 Brazil 292 91 383 4 735 593 9 120 015 13 855 608 65.82% 0.65%
27 France, metropolitan 98 327 425 1 592 919 12 004 098 13 597 017 88.28% 0.64%
28 Viet Nam 929 166 1 095 9 491 311 3 043 458 12 534 769 24.28% 0.59%
29 Cyprus 134 177 311 5 166 089 7 174 723 12 340 812 58.14% 0.58%
30 Canada 210 164 374 2 569 373 7 212 024 9 781 397 73.73% 0.46%
31 Oman 5 58 63 5 704 8 926 419 8 932 123 99.94% 0.42%
32 Malaysia 456 163 619 6 587 734 2 158 859 8 746 592 24.68% 0.41%
33 Qatar 57 69 126 1 123 717 6 145 431 7 269 149 84.54% 0.34%
34 Nigeria 198 73 271 3 517 645 3 429 887 6 947 532 49.37% 0.33%
35 Sweden 90 208 298 1 004 333 5 448 524 6 452 857 84.44% 0.30%
Subtotal, top 35 shipowners 20 729 27 002 47 731 543 900 223 1 466 373 485 2 010 273 707 72.94% 94.99%
Rest of the world unknown 3 096 3 146 6 242 37 011 088 69 116 093 106 127 181 65.13% 5.01%
World 23 825 30 148 53 973 580 911 310 1 535 489 578 2 116 400 888 72.55% 100.00%
36
2. Maritime transport and infrastructure
200
150
USD bn
100
50
0
Bulk Container Oil LNG Offshore Small LPG Vehicle Roll-on Reefers
carriers ships tankers carriers supply dry cargo carriers carriers roll-off
vessels vessels cargo ships
Live Fleet On Order Fleet
Source: UNCTAD, based on data from VesselsValue, as of 1 June 2021.
Note: Includes all vessels above 1,000 GT.
Second-hand ship prices can be quite volatile. Since the last quarter of 2020, there have, for example,
been significant increases in the value of container ships. Between end-2020 and mid-June 2021
the Containership Secondhand Price Index increased by 71 per cent. Sales were at their highest
since 2013, reflecting the demand for smaller container ships of between 5 and 15 years old (Clarksons
Research, 2021a).
There have also been significant increases in the prices for second-hand bulk carriers. Since October 2020,
the Bulk Carrier Secondhand Price Index has been steadily increasing – during the first half of 2021
prices of various vessel sizes aged between 5 and 10 years rose by between 25 and 50 per cent
(Miller, 2021). Higher prices reflect strong short-term market confidence, based on rising commodity
prices, high earnings for bulk carriers and projections for increasing global seaborne bulk trade (Clarksons
Research, 2021b). Since the beginning of 2021, sales have been at their highest for the past five years
(Roussanoglou, 2021a).
To a great extent, selling and purchasing decisions are driven by expected future profitability
(Haralambides et al. 2005). In times of tight vessel supply, higher freight rates drive up the prices of ships
(see chapter 3). The stronger market for used vessels may also signal a return in investor confidence. By
buying second-hand ships, companies can expand rapidly by acquiring almost instantly available tonnage
(Sancricca, 2016).
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REVIEW OF MARITIME TRANSPORT 2021
38
2. Maritime transport and infrastructure
Table 2.6 Leading flags of registration, ranked by value of total tonnage, 2021
(million US dollars) and principal vessel types
Ferries and General
Bulk Container Offshore Oil passenger Gas cargo Chemical Other/ not
Flag of Registration carriers ships vessels tankers ships carriers ships tankers applicable Total
1 Panama 46 903 23 289 14 056 12 065 12 786 10 108 3 768 5 260 6 314 134 550
2 Marshall Islands 32 671 8 217 12 787 26 845 1 513 14 537 430 4 470 1 917 103 388
3 Liberia 29 781 26 351 10 520 20 941 430 5 977 796 2 862 1 439 99 097
4 Bahamas 5 177 706 22 781 6 521 28 250 12 000 65 74 2 303 77 878
5 Hong Kong, China 25 050 25 442 260 10 404 42 6 439 1 318 1 687 105 70 747
6 Malta 10 205 14 925 4 240 9 448 15 166 6 407 1 740 1 661 834 64 626
7 Singapore 13 509 16 531 7 589 11 445 7 947 803 3 560 1 189 62 571
8 China 16 555 5 609 7 728 8 023 4 159 731 2 885 1 668 3 079 50 436
9 Italy 650 196 284 852 15 027 200 1 826 327 621 19 985
10 Greece 3 305 245 1 8 375 1 338 5 388 52 82 22 18 808
Subtotal top 10 183 806 121 512 80 246 114 918 78 711 69 735 13 684 21 651 17 823 702 087
Other 28 649 37 260 68 847 32 846 41 571 26 375 22 785 11 375 13 561 283 269
World total 212 455 158 771 149 093 147 764 120 282 96 110 36 470 33 026 31 384 985 356
Source: UNCTAD calculations, based on data from Clarksons Research, as at 1 January 2019 (estimated current value).
Note: Value is estimated for all commercial ships of 1,000 gross tons and above.
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REVIEW OF MARITIME TRANSPORT 2021
China has the largest share at around 40 per cent. Since the 1980s, based on cost advantages
and with strong government policy support, China's shipbuilding industry has sought to improve
its capabilities and expand capacity. In 1982, the shipbuilding ministry was ‘corporatized’ as the
China State Shipbuilding Corporation (CSSC) which now administers most commercial and military
shipbuilding. This prioritized development in prosperous coastal regions through decentralized
organization of diverse related industries. Focussing on international demand, the industry also had
greater access to foreign capital, and in the last two decades Chinese companies have entered into
technology-sharing agreements with foreign shipbuilders giving them access to foreign equipment,
materials and technical expertise. R&D institutes and academic organizations in China have also
enhanced their research, development and design capabilities (Market and Research News, 2021
and Medeiros et al. 2021). As a result, over recent years China has improved its building techniques
and efficiency and increased its market share not just for bulk carriers and container ships but also for
segments where it has previously not operated, such as passenger ships and LNG carriers (Hellenic
Shipping News, 2021).
New orders
Between January 2020 and January 2021, the global orderbook declined by 16 per cent. The sharpest
reductions were for bulk carriers, down 36 per cent, followed by ferries and passenger ships, down 32 per
cent. By contrast, other segments grew: liquefied gas carriers, up 10 per cent, and general cargo ships,
up 6 per cent (figure 2.8).
From a longer-term perspective, the fleet orderbook has been shrinking since 2011, reaching
165,520,744 dwt in January 2021, the lowest level for the last decade. This is largely the result of constraints
on finance combined with uncertainty over future choices of energy sources, and compounded from 2020
by the impacts of COVID-19 on trade volumes and economic activity. At the beginning of 2021, order
levels for container ships were similar to those in 2018, for bulk carriers to those in 2004–2006, and for oil
tankers to those in 2001, 2003 and 2020 (figure 2.9).
Since early 2021, however, there has been a surge of new orders. As world trade gradually recovered
during the second half of 2020 and the first half of 2021, demand for ships increased – responding
to severe fleet capacity constraints and the uptick in freight rates. In the first half of 2021, newbuild
investment was at its highest since the first half of 2014 (Bak, 2021), with record-breaking orders for
container ships – almost eight times those in the first half of 2020. New building orders were spearheaded
by those for Panamax container ships (ShipInsights, 2021). There has also been an increase for LNG
carriers (Roussanoglou, 2021b).
The largest increases in orders during this period were for Chinese and Korean shipbuilders (Maritime
Executive, 2021). However, these orders appear to be concentrated in a few shipyards – which could
increase average contract lead times and hinder fleet growth (Springer, 2021, and Walia, 2021).
Figure 2.8 Growth of world fleet orderbook, 2012–2021, percentage change in dead-weight
tonnage
100
80
60
Oil tankers
0
Container ships
-20
Ferries and
-40 passenger ships
Bulk carriers
-60
-80
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing merchant vessels of 100 gross tons and above; beginning-of-year figures.
40
2. Maritime transport and infrastructure
300 000
250 000
200 000
Ship recycling
Even through the COVID-19 disruption, the tonnage of ships sold for recycling increased by 44 per cent
in 2020, reaching 17,400,564 GT. Nevertheless, recycling levels remain lower than in the 2014–2017
period. Despite high scrap metal prices, ship owners believe they can continue to earn high incomes by
continuing to operate older vessels.
In 2020, almost half of the recycling was of bulk carriers, reflecting declining charter rates and following
the trend of recycling ageing tonnage (Jiang, 2021 and Clarksons Research, 2021c). Around two-thirds
of reported tonnage sold for recycling in 2020 was in Bangladesh and India. With the addition of Pakistan
and Turkey, the share of the top four countries reached 93 per cent (table 2.8). The highest increases in
shares were for Pakistan, by 14.7 percentage points, and for India by 3.2 percentage points.
In contrast, there were noticeable reductions in Bangladesh, by 15 percentage points, and in China by
2 percentage points. In China, this follows a ban on receiving international vessels for recycling, which
Table 2.8 Reported tonnage sold for ship recycling by major vessel type and country
of ship recycling, 2020
(thousand gross tons)
Rest of the
Vessel type Bangladesh India Pakistan Turkey China world World total Percentage
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REVIEW OF MARITIME TRANSPORT 2021
entered into force in 2018. Between 2017 and 2020, China’s share of global recycling tonnage fell from 16
to 1 per cent.
The extent of ship recycling depends on a number of factors, including vessel age, freight markets, and
trade patterns (OECD, 2019). In addition, ship owners have to take into account new environment-related
regulations, such as IMO limits on the sulphur content of ship fuel oil, the IMO Ballast Water Management
Convention, and emerging IMO regulations on decarbonization. When capital expenditures for retro-fitting
older ships to comply with new regulations exceed the return on investment, owners are likely to favour
recycling.
Table 2.9 Status of uptake of selected technologies in global shipping, as of 14 June 2021
Equipment type Energy-saving technologies Ballast water management systems (Modern) eco-engine
Fleet, number of ships 3 929 18 925 6 698
Percent of fleet 3.9% 18.8% 6.7%
(Percent of GT capacity) (19.0%) (59.5%) (25.7%)
Orderbook 254 2 078
Percent of orderbook 6.8% 55.3%
(Percent of GT capacity) (13.2%) (91.6%)
Source: Clarksons Research (2021). Tracking “Green” Technology Uptake - June 2021 and Eco-fleet dashboard. Shipping
Intelligence Network.
Notes: As of 14th June 2021, the global fleet (vessels above 100GT) stood at 100,500 ships, as per Clarksons data. Energy-
saving technologies encompass waste heat recovery systems, exhaust gas economizers, propeller ducts, pre-Swirl or stator
fins, rudder bulbs, rigid sails, air lubrication system, bow enhancement and solar panels. Modern eco-engine refers to a vessel
with an electronic injection main engine contracted after 1st January 2012.
Data based on reported equipment in merchant fleet, which may underestimate total uptake.
42
2. Maritime transport and infrastructure
Responding to this challenge will require significant investment. Expanding the fleet to cater for trade
growth over the coming three decades could cost around $0.2 trillion while retrofitting or replacing the
existing fleet over the next 30 years, could cost an additional $2.19 trillion (Ovcina, 2021).1 Since it is
impossible to renew the whole fleet by 2050, innovation and new technologies will also need to be applied
to existing vessels.
Table 2.10 Some proposed IMO measures to reduce greenhouse gas emissions
Category Subcategories Examples of measures
Short-term measures, to be • Technical and operational • New operational energy-efficiency standards for new
agreed upon between 2018 energy-efficiency measures and existing ships (EEXI)
and 2023
• Use of alternative low-carbon • Consider and analyse the use of speed optimization and
or zero-carbon fuels for marine reduction
propulsion and other technologies
• Developments of port infrastructure to support
alternative fuels
• Progressive tightening of standards on minimum energy
efficiency levels and emissions, based on ship design
and engine performance data (CII)
• R&D efforts on marine propulsion with alternative fuels
• Encourage the development of national action plans to
develop policies and strategies to address greenhouse
gas emissions from international shipping
Mid-term measures, to be • Market-based measures – carbon • Market-based measures could include an offsetting
agreed upon between 2023 pricing mechanisms to give firms scheme, a maritime emissions trading scheme, or a
and 2030 economic incentives to emit less carbon levy
• Operational energy efficiency • Specify in the national action plan measures to increase
measures for new and existing ships the uptake of low- and zero-carbon fuels
Long-term measures • Measures to ensure zero-carbon and
(to be agreed beyond 2030) fossil-free fuels
At present, the regulatory outlook is uncertain. The IMO has yet to agree on a number of issues, such as
the market-based mechanism, and the outcome is likely to be combination of measures. Moreover, the
IMO regulations will be accompanied by those from other bodies such as the EU. On 14 July 2021 the EU
announced a series of measures:
• Including ships of 5,000 GT and above in its Emissions Trading System for all intra-EEA voyages
and for 50 per cent of voyages starting and ending in the bloc.
• Establishing greenhouse gas intensity standards for ship fuels.
• Introducing taxes on bunkers sold in the European Economic Area.
The interplay between different regulatory regimes, combined with volatility in carbon prices is generating
considerable uncertainty – which is compounded by the difficulty in modelling the outcome of each
measure (ING, 2021). Total emissions will depend on ship type, size and engine, as well as on sea routes
1
These projections exclude fuel transition-related investments, such as storage and transport of alternative fuels.
43
REVIEW OF MARITIME TRANSPORT 2021
and navigation conditions – information which may not be easily accessible (Sanchez et al, 2020 and
Plevrakis, 2020).
Since 2020, UNCTAD has been collaborating with IMO on assessing the impact of short-term measures.
In a report published in 2021, UNCTAD looks at the combined impact of two measures: a new energy
standard, the energy efficiency existing ship index; and a new operational requirement, the carbon intensity
indicator (UNCTAD, 2021b). The report considers their potential impacts on ship costs, travel distances,
fleet distribution, routing patterns, and the use of different types of vessels as well as on maritime logistics
costs. The report concludes that the greatest impact will be on smaller vessels plying shorter routes and
on container ships and tanker vessels (figure 2.10).
60
The easiest and cheapest way to reduce emissions is to reduce ship speed. Operating at less than full
power cuts fuel consumption, and thus carbon emissions, while reducing operating costs. However,
transporting the same cargo volumes at slower speeds will also require more ships. The report estimates
that the IMO short-term measures will require 13 per cent more vessel capacity. This will entail considerable
capital expenditure and have important implications for shipbuilders. Drewry estimates that global
shipbuilding capacity is equivalent to 7 per cent of the global fleet and that, while maintaining also normal
fleet replacement and growth, increasing vessel capacity by 13 per cent would require a ramp-up period
of around five years (UNCTAD, 2021b).
The study points out that reducing speeds will also mean reconfiguring services – especially for Pacific
and Caribbean SIDS where the maritime trade typically depends on smaller cargo ships on shorter routes.
Smaller ships will also be needed, when a deep-sea liner that is going slower now needs to skip a
port – which would require more transhipment, thereby increasing costs.
44
Table 2.11 World fleet by fuel type as of 1 January 2021
Ships % of GT % of known TEU % of known Dwt % of known
Fuel type Ships GT TEU dwt Ships % GT % TEU % Dwt % known fuel type fuel type fuel type fuel type
Very Low-Sulphur (VLS) Intermediate Fuel Oil (IFO) 36 188 993 715 259 18 384 210 1 534 083 046 36.26 69.08 70.97 72.11 47.12 72.26 71.29 74.54
VLS Marine Diesel Oil (MDO) 33 118 29 698 675 149 929 27 886 341 33.18 2.06 0.58 1.31 43.12 2.16 0.58 1.36
IFO 380* 3 635 283 299 533 6 949 482 437 386 040 3.64 19.69 26.83 20.56 4.73 20.60 26.95 21.25
VLS Marine Gasoil (MGO) 2 539 7 441 142 34 467 6 769 951 2.54 0.52 0.13 0.32 3.31 0.54 0.13 0.33
Ultra-Low Sulphur (ULS) MDO 381 697 587 7 000 661 627 0.38 0.05 0.03 0.03 0.50 0.05 0.03 0.03
LNG, VLS IFO 373 36 964 811 144 014 30 159 817 0.37 2.57 0.56 1.42 0.49 2.69 0.56 1.47
LNG, VLS MDO 168 10 814 060 12 703 8 190 743 0.17 0.75 0.05 0.39 0.22 0.79 0.05 0.40
IFO 180 166 7 351 589 75 955 9 536 173 0.17 0.51 0.29 0.45 0.22 0.53 0.29 0.46
ULS IFO 43 352 580 15 617 438 639 0.04 0.02 0.06 0.02 0.06 0.03 0.06 0.02
LNG, VLS MGO 37 424 846 10 430 662 0.04 0.03 0.00 0.02 0.05 0.03 0.00 0.02
LNG 32 459 380 260 139 039 0.03 0.03 0.00 0.01 0.04 0.03 0.00 0.01
MDO 22 652 797 1 629 188 652 0.02 0.05 0.01 0.01 0.03 0.05 0.01 0.01
ULS MGO 22 26 594 16 571 0.02 0.00 0.00 0.03 0.00 0.00
Biofuel 18 360 677 11 684 386 434 0.02 0.03 0.05 0.02 0.02 0.03 0.05 0.02
MGO 12 880 222 122 003 0.01 0.06 0.01 0.02 0.06 0.01
Methanol, VLS IFO 11 336 377 552 044 0.01 0.02 0.03 0.01 0.02 0.03
Ethane, VLS IFO 7 292 595 264 750 0.01 0.02 0.01 0.01 0.02 0.01
45
Nuclear 6 144 573 1 324 50 079 0.01 0.01 0.01 0.00 0.01 0.01 0.01 0.00
LPG, VLS IFO 5 236 752 272 690 0.01 0.02 0.01 0.01 0.02 0.01
Biofuel, LNG 4 43 851 3 907 0.00 0.00 0.00 0.01 0.00 0.00
Compressed Natural Gas (CNG), VLS MDO 3 111 058 105 325 0.00 0.01 0.00 0.00 0.01 0.01
IFO 380, LNG 2 251 144 18 400 0.00 0.02 0.00 0.00 0.02 0.00
MDO, MGO 2 183 254 16 030 0.00 0.01 0.00 0.00 0.01 0.00
2. Maritime transport and infrastructure
Biofuel, VLS MGO 2 6 810 9 876 0.00 0.00 0.00 0.00 0.00 0.00
VLS IFO, Well Fuel 1 86 952 166 546 0.00 0.01 0.01 0.00 0.01 0.01
CNG, VLS MGO 1 30 742 31 473 0.00 0.00 0.00 0.00 0.00 0.00
LNG, MDO 1 65 314 600 22 437 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
IFO 380*, MGO 1 149 215 19 189 0.00 0.01 0.00 0.00 0.01 0.00
Methanol 1 51 837 10 670 0.00 0.00 0.00 0.00 0.00 0.00
Nuclear, VLS MDO 1 33 500 9 000 0.00 0.00 - 0.00 0.00 0.00 - 0.00
Unknown fuel type 22 998 63 435 988 115 238 69 356 421 23.04 4.41 0.44 3.26
Grand Total 99 800 1 438 599 714 25 904 122 2 127 304 575 100.00 100.00 100.00 100.00
World total known fuel type 76 802 1 375 163 726 25 788 884 2 057 948 154 100.00 100.00 100.00 100.00
46
2. Maritime transport and infrastructure
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REVIEW OF MARITIME TRANSPORT 2021
The energy transition has major implications for ports. Less trade in oil will reduce revenue from storing
and distributing fossil fuels. Preparing for a future without carbon fuels, ports are therefore aiming to
develop new markets and value-added services (The Conversation, 2021 and Manners-Bell, 2021). And
despite the pressures faced in 2020, many have maintained their plans for investing in environmental
sustainability (IAPH-WPSP, 2021). These include production of alternative energy, infrastructure to
import alternative fuels, and for bunkering and storage to facilitate onward distribution (table 2.12).
Some ports have benefitted from infrastructure green recovery plans and others from incentives for
foreign investment.
Sources: Argus Media (2021): Japan studies options to cut coastal shipping emissions. ArgusMedia, 2/7/2021. OffshoreWind.
Biz (2021) Equinor, Ørsted, Boskalis Join AquaVentus Offshore Wind-to-Hydrogen Project 4/5/2021. Savvides; Nick (2021).
Antwerp and CMB team up to launch multimodal hydrogen filling station. The Loadstar, 10/6/2021. Liebig; L. (2021). The
United Arab Emirates is well placed to capitalise on the pivot to hydrogen 13/4/2021. Pekic, Sanja (2021). North Sea Port to
get hydrogen pipeline network. Offshore Energy, 3/6/2021.
There is also now greater interest in smarter and greener ports. Beyond transforming ports into
carbon-neutral ecosystems this means using new data environments and artificial intelligence to enhance
competitiveness and sustainability. Some factors affecting the development of such ports are indicated
in table 2.13.
48
2. Maritime transport and infrastructure
Source: Chen, J.; Huang, Tiancun, Xie, X; Lee, P. and Hua, C. (2019). Constructing the Governance Framework of a Green
and Smart Port. Journal of Marine Science and Engineering.
* Defined as “more modern intelligent technologies integrated into port working environments to improve port operations”.
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REVIEW OF MARITIME TRANSPORT 2021
Source: UNCTAD, based on data provided by selected member ports of the TrainForTrade network.
Abbreviations: CAPEX, capital expenditure; EBITDA, earnings before interest, taxes, depreciation and amortization.
50
2. Maritime transport and infrastructure
2
Cargo
0
-2 Revenue
-4
-6
-8
-10
2016 2017 2018 2019 2020
Source: UNCTAD, based on data provided by selected member ports of the TrainForTrade network.
51
REVIEW OF MARITIME TRANSPORT 2021
Box 2.5 Port performance analysis of the national port system in Peru in 2020
In Peru, in 2020 there was a 10.9 per cent fall in volumes to 97.4 million tons while the number of
containers (in TEU) handled remained stable nationally. However, there was a drop in container traffic
at the larger international terminals of 3 per cent compared to 2019 due to the impact of the COVID-19
health emergency (see table).
The main types of goods, containers, solid bulk, and break-bulk cargo, decreased by 0.3 per cent,
3.7 per cent and 4.9 per cent, respectively, as shown in the table, which illustrates the movement of
cargo at public and private port terminals for 2019/2020.
Change (%)
Type of Merchandise Unit of measure Year 2019 Year 2020 2020/2019
TEU 2 678 258 2 654 289 -0.9%
LoLo containers units 1 618 433 1 592 256 -1.6%
tons 25 905 625 25 832 736 -0.3%
Break Bulk tons 4 057 174 3 858 419 -4.9%
Bulk Solids tons 12 165 301 11 714 440 -3.7%
Bulk Solid Minerals tons 33 122 675 27 978 125 -15.5%
Liquid Bulks tons 33 756 658 27 883 897 -17.4%
RoRo tons 333 213 207 063 -37.9%
Total Load tons 109 340 647 97 474 680 -10.9%
However, these reductions are moderate compared to those for bulk minerals, liquid, and roro cargo,
which decreased by 15.5 per cent, 17.4 per cent, and 37.9 per cent, respectively.
During the year 2020, the National port system handled a total of 2.6 million TEUs, presenting a slight
drop of 0.9 per cent, compared to the year 2019.
Source: National Port Authority of Peru.
Financial performance
Financial performance of ports can be measured as the average gross revenue per ton of cargo. This
ranged from $1.9 per ton in Europe, and $2.26 in Asia, to $5.31 in Africa. At the global level the sources
of revenues are indicated in figure 2.12, showing the split between port dues on vessels and cargo
throughput, port service charges, and income derived from land and concession rights.
Around half of revenues come from vessel and cargo charges for the use of primary port infrastructure.
This proportion is likely to fall over time with the development of digitalized ports and energy hubs, using
either the concession or landlord model.
Profitability is measured as earnings before interest, taxes, depreciation, and amortization (EBITDA).
Businesses with high demands for infrastructure investment require elevated levels of EBITDA to be
sustainable. In 2020 average profitability declined by 12 per cent in Europe, by 17 per cent in Asia and
by 25 per cent in Africa. Latin America showed no
change. These declines can be partly explained
Figure 2.12 Average revenue mix of by the impacts of COVID-19, though in Africa
ports, 2016–2020 there must be other major factors since volumes
and revenues showed only a minor impact from
the pandemic.
Other Cargo dues
28% 37% In performance terms, the reported numbers
show a falloff in 2020. While there have been
profitability drops in other periods this decline can
Rents
be partially explained by the COVID-19 pandemic.
5%
Last year the scorecard covered the
Concession fees Vessel dues period 2015–2019, for which EBITDA as
14% 16% a proportion of revenue was 38.8 per cent
Source: UNCTAD, based on data provided by selected (indicator 1). The 2021 scorecard covered the
member ports of the TrainForTrade network. period 2016–2020 for which the proportion
52
2. Maritime transport and infrastructure
declined to 33 per cent. The impact was, however, lower in Europe where averages remained at 59 per
cent and in Latin America at 41 per cent.
A high-level comparison of revenue profiles shows the mix between port dues on vessels and cargos, port
service charges and incomes derived from lands and concession rights. Between 2020 and 2021 scorecards,
the proportion of total capital expenditure for environmental purposes fell from 7.2 to 6.4 per cent, while the
proportion of operating costs for environmental purposes fell from 2.3 to 1.8 per cent. In some countries the
environmental data are difficult to extract since they can be embedded in the total capital or operating spends.
Gender equality
Sustainable Development Goal 5.5 calls for full and effective participation of women and equal opportunities
for leadership at all levels of decision making in political, economic, and public life. In this respect, ports
still do not perform well. Between 2020 and 2021 scorecards, the average female proportion of the port
entity workforce fell slightly, from 17.6 to 17.5 per cent. The proportion in Europe is significantly higher at
24.8 per cent, though most of these women work in management or administration.
Overall, the figures are more encouraging for management and administrative roles. Between 2020 and 2021
scorecards, the proportion of women rose from 38 to 42 per cent. Asia led the way at 52 per cent, followed by
Europe at 39 per cent. Female participation is however far lower for cargo handling and port operations. There
is thus still a lot to be done to achieve the SDG target to “Achieve gender equality and empower all women
and girls.” Box 2.6 illustrates how the Philippines Ports Authority is making the changes to meet this objective.
Box 2.6 Gender and development in the Philippine Ports Authority and its journey
The Philippine Ports Authority (PPA), under the present leadership of Atty. Jay Daniel R. Santiago,
General Manager, has continued its commitment to institutionalize gender and development (GAD) in
all the ports under its jurisdiction. For SDG 5: “Gender Equality” PPA now satisfies target 5.5 “Ensure
women’s participation and leadership in decision-making”.
The port industry in the Philippines is undeniably male-dominated. However, in recent years, women
have been making remarkable progress, within the Authority particularly at management levels and
PPA continues to put a premium on women’s empowerment. In its GAD journey there have been many
firsts in entrusting some of highest managerial positions to female officers: first female Assistant General
Manager on Finance and Administration (executive level); first female Port Manager (managerial level in
field offices); and first female Department Manager (managerial level in head office).
As of May 2021, women made up half of PPA’s workforce, amounting to 1,026 female personnel. The
highest women-occupied positions are at the middle management level with two department managers,
five port managers and 56 division managers. Some women employees are also taking male-dominated
positions such as terminal supervisor, safety officer, civil security officer, engineer, terminal operations
officer, or industrial security officer. This shows that the authority values the immense contributions of
women employees in the areas of decision-making, management, operations, and even security.
To further strengthen GAD initiatives the Authority ensures compliance with statutory laws upholding the
welfare and development of Filipino women. For instance, PPA strictly observes the provisions of the
General Appropriations Act and Republic Act 9710, also known as the Magna Carta of Women, which
directs government agencies to formulate a GAD plan, the cost of which shall be not less than 5 per cent
of the annual budget. Annually, PPA appropriates 5 per cent of its corporate budget for implementing
the Authority’s GAD plans and programmes. Among the GAD flagship projects and programmes are the
construction of gender-neutral facilities and halfway houses, along with capacity-building to increase
awareness among employees.
In recent years, PPA has been crafting and implementing gender-responsive policies, plans and
programmes to advocate gender equality and women’s empowerment. This has been given an added
impetus by the UNCTAD TrainForTrade port management programme in the Philippines. Many women
have participated in the three cohorts of the programme and more are expected to join subsequent cycles.
Source: Philippine Ports Authority.
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REVIEW OF MARITIME TRANSPORT 2021
while Africa on average has longer journeys made by larger vessels and an average load of 15,681 tons.
Globally, there was little change in average vessel size which rose from 18,124 to 18,184 Gross Tons (GT)
(indicator 14) in the 2016–2020 period compared with the previous five-year average (2015–2019).
One of the most direct impacts of COVID-19 was on the number of passengers. For the 2016–2020 period,
compared with the previous five-year average, passenger numbers fell by 34 per cent (indicator 23). There
was similar fall in the number of cruise passengers, by 28 per cent (indicator 24). Between years 2019
and 2020 only, the number of passengers on ferries fell by 71 per cent and on cruise ships by 76 per cent.
Overall, modern ports show many similarities in their financial and operations data as well as in their
declared policy profiles and corporate structures. Nonetheless, each port entity has its own unique
characteristics. Some may have greater autonomy on pricing while for others this might require national-
level approval. Control over major investments, however, appears to be retained at the political level.
The pandemic has accelerated digitalization and decarbonization and key theme of future data analysis
will be on how performance levels are affected by such changes.
54
2. Maritime transport and infrastructure
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56
This chapter reports on recent developments in freight
rates and transport costs. It covers 2020 and the first half
3
of 2021, tracking changes in demand and supply across
key shipping markets. It considers the immediate outlook
for freight markets and examines the impact on prices.
Sustained higher container freight rates would increase costs Freight rates,
in global supply chains which could work their way through
to higher consumer prices, with adverse economic effects maritime transport
globally – but particularly on the small island developing
states (SIDS) and the least developed countries (LDCs) whose costs and their
consumption and production depend more on international
trade. There have been similar surges in trade and prices for impact on prices
dry bulk freight. The situation for tanker shipping, however,
has been very different: a drop in global fuel demand and high
carrying capacity have pushed tanker rates to record lows.
Record-breaking
freight rate levels
As of late 2020 and into 2021 Container freight rates Dry bulk freight rates Tanker freight rates
freight rates surged across
containerised and dry bulk Skyrocketed amid Reached record Fell to record lows as
shipping markets and hit surge in demand for breaking levels, global fuel demand
record highs container shipping driven by solid decreased and the
and limited capacity growth in demand supply of vessel
Tanker markets came under including container that exceeded carrying capacity
pressure with tanker rates shortages and fleet growth remained high
reaching low levels congestion
at ports
+243%
+2.2%
+11% +1.5%
+0.6%
Simulation is
conducted using Simulation
the new dataset assumption:
developed by
UNCTAD and Improving
the World Bank structural Port Trade facilitating Shipping
determinants infrastructure environment connectivity
Simulation results:
Reduction in
maritime import
transport costs -4.1% -3.7%
-4.4%
3. Freight rates, maritime transport costs and their impact on prices
Figure 3.1 Growth of demand and supply in container shipping, 2007–2021, percentage
20
15
10
Demand
5 Supply
-5
-10
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(estimate)
Source: UNCTAD secretariat calculations. Demand is based on data from chapter 1 – figure 1.5, and supply is based on data
from Clarksons Research, Container Intelligence Monthly, various issues.
Notes: Supply data refer to total capacity of the container-carrying fleet, including multipurpose and other vessels with some
container-carrying capacity. Demand growth is based on million TEU lifts.
In an effort to maintain freight rates during the period of lower demand, carriers restricted capacity.
Then as demand picked up, they released more capacity but by that time the supply was being
constrained by other factors, notably port congestion and equipment shortages which kept vessels
waiting, especially in West Coast North America. The result was exacerbated disruption and
inefficiency at port.
By the end of 2020, freight rates had surged to unexpected levels. This was reflected in the China
Containerized Freight Index (CCFI) for both short- and long-term contracts (figure 3.2). In the second
quarter of 2020, the CCFI stood at 854 points, but by the fourth quarter was 1,250 points, and for the first
and the second quarters of 2021 had reached new records, beyond 2,000 points.
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REVIEW OF MARITIME TRANSPORT 2021
2 000 1 961
2021-Q1
1 500 1 250
2020-Q4
1 000
500
854 910
2020-Q2 2020-Q3
0
2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
Source: Clarkson Shipping Intelligence Network Timeseries, Shanghai Shipping Exchange.
Note: The CCFI tracks spot and contractual freight rates from Chinese container ports for 12 shipping routes across the
globe, based on data from 22 international carriers.
July 2012
July 2013
July 2014
July 2015
July 2016
July 2017
July 2018
July 2019
July 2020
July 2021
Source: UNCTAD secretariat, based on data from Clarkson Shipping Intelligence Network.
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3. Freight rates, maritime transport costs and their impact on prices
by the end of July 2021 had reached $10,067/FEU (figure 3.3). Moreover, this does not take into account the
premiums cargo owners were often charged to get any certainty that their boxes would be moved promptly.
The surge in spot freight rates also extended across developing regions, including South America and Africa.
On the China to South America (Santos) route the rate had been $959/TEU in July 2020 but by the end of
July 2021 had reached $9,720/TEU. Over the same period, rates on the Shanghai to West Africa (Lagos)
route increased from $2,672/TEU to $8,102/TEU. There was also a surge in rates from China to the Arab
region. Box 3.1 provides further information on the impact of COVID-19 on maritime freight in the Arab region.
Box 3.1 Impact of COVID-19 on maritime freight rates in the Arab region
Fluctuations in freight rates reflect changes in lockdown policies and varying speeds of recovery, as
well as the impact of shortages of both containers and ships and congestion in key ports and shipping
nodes. These surges are likely to be amplified in most of the low- and middle-income countries of the
Arab region, especially those suffering from conflicts or economic or financial crises which have had
major impacts on patterns of production and consumption – and on maritime freight rates. Between
October 2020 and June 2021 the SCFI from Shanghai to Dubai rose by 176 per cent and from Shanghai
to the Mediterranean ports by 400 per cent.
Mar 2019
May 2019
Jul 2019
Nov 2019
Jan 2020
Mar 2020
May 2020
Jul 2020
Nov 2020
Jan 2021
Mar 2021
May 2021
Sept 2019
Sept 2020
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Table 3.1 Contract freight rates, inter-regional, 2018–2020, $ per 40-foot container
(FEU)
From To Average 2018 2019 2020
Africa 1 862 1 812 1 849 1 924
Asia 758 748 750 775
Africa
Europe 1 607 1 431 1 643 1 747
Latin America 1 950 2 010 1 860 1 979
Africa 1 946 1 800 1 927 2 112
Asia 768 737 747 821
Europe 1 848 1 782 1 847 1 916
Asia
Latin America 2 198 2 290 2 075 2 230
North America 2 580 2 426 2 603 2 711
Oceania 1 803 1 770 1 790 1 850
Africa 1 701 1 595 1 650 1 858
Asia 947 967 870 1 004
Europe 887 804 881 976
Europe
Latin America 1 232 1 019 1 302 1 376
North America 1 838 1 518 1 742 2 256
Oceania 2 002 1 996 1 933 2 077
Africa 1 910 1 778 1 951 2 000
Asia 1 796 1 623 1 963 1 802
Latin America Europe 1 751 1 313 1 977 1 961
Latin America 1 529 1 349 1 699 1 539
North America 1 716 1 521 1 882 1 745
Africa 2 994 2 890 3 112 2 981
Asia 1 129 1 009 1 111 1 269
Europe 1 097 858 1 109 1 323
North America
Latin America 1 353 1 254 1 318 1 486
North America 1 516 1 534 1 429 1 584
Oceania 2 722 2 538 2 634 2 996
Source: UNCTAD, based on data provided by TIM Consult Market Intelligence https://timconsult.com/service_areas/transport/
benchmarking/.
Note: The data set provides regional averages for forty-foot container dry cargo freight, as negotiated for routes where rates were
available for at least 5 shippers and at least 500 TEU per year on port-pair basis.
Rates are “gate-in gate-out”, i.e., including terminal handling charges and all charges and surcharges of ocean transport. Not included are
pre- and on-carriage as much as classical administrative services of forwarders (customs clearance, booking and invoice control fees, etc.).
The average is unweighted, based on representative main ports. Trade imbalance is also impacting freight rates.
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3. Freight rates, maritime transport costs and their impact on prices
The new data set, provided by TIM Consult Market Intelligence as per table 3.1, enables an overview
of actual basic freight rates on different routes, including inter-regional routes, and their development
over time.1 Imbalanced trade flows mean that transport costs tend to be higher in the direction of the
high-demand region thereby impacting freight rates (Jonkeren, Olaf, et al, 2011). Between 2018 and 2020,
rates on the Asia-Europe leg, for example, were twice as high as those on the Europe-Asia leg. Similarly,
rates for exports from Asia to North America were twice as import rates. As for the Asia-Africa trade the
ratio was 2.6, and intra-African freight rates were 2.4 times higher than intra-Asian rates. Over this period
the most volatile rates were those to and from Latin America.
1 500
308
1 000 18 June 2020
500
0
July 2011
July 2012
July 2013
July 2014
July 2015
July 2016
July 2017
July 2018
July 2019
July 2020
July 2021
Source: UNCTAD secretariat, based on data from the New ConTex index produced by the Hamburg Shipbrokers Association.
See http://www.vhss.de (Accessed on 25 July 2021).
Notes: The New ConTex is based on assessments of the current day charter rates of six selected container ship types, which
are representative of their size categories: Type 1,100 TEUs and Type 1,700 TEUs with a charter period of one year, and
Types 2,500, 2,700, 3,500 and 4,250 TEUs with a charter period of two years.
Index base: October 2007 – 1,000 points.
5. Container shipping profits are high, as are short and medium terms
freight rates
High freight rates have boosted the profits of global container shipping companies. In the first quarter
of 2020 their operating profits – earnings before interest and tax – were $1.6 billion, but in the same
quarter of 2021 reached $27.1 billion. In 2020 the full-year profit of these carriers was around $25.4 billion,
but 2021 it is likely to be an unprecedent $100 billion (Drewry, 2021). And this at a time of pandemic-related
disruptions, congestion at ports and a persistent shortage of containers.
1
TIM Market Intelligence Initiative Global Ocean Transport.
Overview & Methodology: TIM Consult are operating the Market Intelligence Initiative (MII) in global ocean transport
(Full Container Load and Less Than Container Load) in support of a Community (consortium) of world-class enterprises
(shippers only). The analyses cover ocean transport on more than 12,000 port pairs, pre- and on-carriage (all modes) and
door-door-transport. The benchmarking as well as the monitoring of freight indices and service levels is updated on a
monthly, quarterly, and annual basis. All input data is provided by shippers and represents actual agreements and volume
allocations. No unnegotiated or not actually allocated rate information is included. Continuous data input is equivalent
to approximately five per cent of world container transport. Data input is carefully cleansed by an expert team plus all
strategic and operative drivers of rate and service levels as much as procurement performance clarified. The analyses and
assessment of shippers’ agreements are conducted by accurate segmentation (by box type, box size, port pair, process
setup) and harmonization (normalization), taking into account all cost and service level drivers in full transparency. The
rate benchmarking and the index information provided to UNCTAD are given on gate-in-gate-out level including all ocean
transport-related charges and surcharges. Not included are pre- and on-carriage as much as classical administrative
services of forwarders (customs clearance, booking and invoice control fees, etc.). MII members range from 1,000 TEU
to 500,000 TEU per year. www.timconsult.com.
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REVIEW OF MARITIME TRANSPORT 2021
Increased earnings have encouraged carrier to order new ships. At the beginning of 2021 the orderbook
for container ships was similar to that in 2018. As noted in chapter 2, the surge in new orders was also
prompted by low prices for new, larger vessels and by the availability of ship financing.
Following the 2008–2009 financial crisis there was a similar rush in orders such that the container ship
order book represented about 60 per cent of the global fleet, and new vessels started entering the market
only a year after the crisis, leading to overcapacity and low freight rates. This is unlikely to happen now.
Indeed the new ships are still unlikely to meet the demand. In recent years, shipping companies were
faced with low earnings and uncertainties about complying with new IMO emission requirements, so
had postponed placing orders (FitchRatings, 2021a). As it usually takes two to three years between the
placement of vessel orders and delivery, the supply-demand imbalance is unlikely to be resolved in the
short term so rates should remain high.
Indeed even the arrival of new ships may not be enough to reduce and stabilize container freight rates.
Global freight rates will remain high until shipping supply-chain disruptions are unblocked and back to
normal, and port constraints and terminal efficiencies are tackled (Hellenic Shipping News, 2021a). This
would entail investing in new solutions, including infrastructure, freight technology and digitalization, and
trade facilitation measures.
Moreover, even when they have new capacity, container lines faced with prolonged port congestion and
closures may take capacity out of the system – keeping freight rates high. It can be argued that port
congestion on the United States West Coast was initially caused by carriers responding to increased
demand by inserting more capacity – but ports were then unable to handle the resulting surge. Moreover,
despite recent improvements, overall port performance remains the lowest it has been in ten years of
records (Global Maritime Hub, 2021).
All the above suggests that high freight rates may be sustained in both short and medium terms. This
could have lasting effects on trade and global supply chains. By end of 2020 and early 2021, Europe was
facing shortages of consumer goods imported from Asia – from home furnishings, bicycles and sports
to children’s toys and dried fruits. Some companies have stopped exporting to certain locations while
others have been looking to shorten their supply chains by looking for goods or raw materials from nearer
locations (Financial Times, 2021).
Another example is Viet Nam’s exports of pepper. According to the Viet Nam Pepper Association, higher
logistics costs have resulted in a loss of export markets. In 2020, for exports to the United States, the
cost per 40-foot container was $2,000 to $3,000 but in the first six months of 2021 this had soared to an
average $13,500. For exports to the European Union there was a corresponding increase, from $800-1,200
to $11,000. This caused importers to switch to pepper from Brazil; for the United States the shipping cost
is only a third of that from Viet Nam and for the European Union only one tenth (Vietnamplus, 2021).
Shipping cost escalation, if sustained, would not only affect exports and imports, as well as production
and consumer prices, but also the prospects for short- and medium-term economic recovery. A
number of governments are worried about this, including China, Republic of Korea, United States, and
Viet Nam, and have raised concerns about the shipping companies.2 In China, faced with record highs in
September 2020, the authorities had put pressure on carriers on the Transpacific routes for both pricing
and capacity management and there were suggestions of setting a ceiling (Financial Times, 2020). In the
Republic of Korea, to ensure that small and mid-sized shippers have access to capacity the government
has announced a plan to subsidize shipping rates – a 20 per cent discount on freight rates and guaranteed
shipping space if they sign long-term service contracts with domestic shipping lines (JOC.com, 2021).
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3. Freight rates, maritime transport costs and their impact on prices
Freight rates were high through the first half of 2021 as a result of continuing higher demand, combined
with fewer new vessel deliveries and increased scrapping activity. Rates were also affected by delays
caused by port congestion. The number of vessels caught up in port congestion rose from 4 per cent
of the fleet in the fourth quarter of 2020 to 5 per cent in the first quarter of 2021. This was mainly due
to increases of exports of iron ore and grain products from Brazil which blocked up to 100 Capesize
and Panamax vessels in Brazilian ports during February and March 2021 (Danish Ship Finance, 2021).
The strength of the dry bulk market was good for carriers. In May 2020 the average monthly earnings of
all bulkers were $4,894/day, but by June 2021 they were $27,275/day – the highest rates in a decade
(figure 3.6).
Figure 3.6 Average weighted earnings all bulkers ($/day), July 2001–July 2021
70 000
60 000
8 971
50 000 15 934 June 2020
40 000 July 2010
8 158
March 2019
30 000
20 000
10 000
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2018
2019
2020
2021
Looking ahead, dry bulk demand should continue to grow and the capacity should be manageable so
rates are likely to remain high. The orderbook is only around 6 per cent of the existing fleet capacity, the
lowest level in three decades (Clarksons Research, 2021b). Future freight rates will be largely determined
by demand growth, particularly from China, but the market will also be affected by the ongoing energy
transition and shifts in fuel mix choices. However, high freight rates could stimulate newbuild orders so that
in the medium term, supply capacity could exceed demand.
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REVIEW OF MARITIME TRANSPORT 2021
Figure 3.7 Average earnings, all tankers, July 2011–July 2021 (United States dollar per day)
80 000
3 749
70 000 June 2021
60 000
50 000 5 237
January 2021
40 000
30 000 2 753
July 2021
20 000
10 000
0
Jul 2011
Jan 2012
Jul 2012
Jan 2013
Jul 2013
Jan 2014
Jul 2014
Jan 2015
Jul 2015
Jan 2016
Jul 2016
Jan 2017
Jul 2017
Jan 2018
Jul 2018
Jan 2019
Jul 2019
Jan 2020
Jul 2020
Jan 2021
Jul 2021
Source: UNCTAD, based on data from Clarkson Shipping Intelligence Network.
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3. Freight rates, maritime transport costs and their impact on prices
Figure 3.8 Simulated impact of current container freight rate surge on import and consumer
price levels
Import price increases Consumer price increases
(%) (%)
30 8 7.5
25 24.2
7
6
20 5
15 4
10 10.6 3
8.7 2.2
2 1.5
5 3.2 1 0.6
0 0
LDC LLDC SIDS World LDC LLDC SIDS World
Sources: UNCTAD calculations based on data provided by Clarksons Research, Shipping Intelligence Network (accessed
2 September 2021), the IMF, International Financial Statistics and Direction of Trade Statistics (accessed 1 June 2021),
UNCTADstat (accessed 1-2 June 2021), and the World Bank, World Integrated Trade Solution (accessed 2 June 2021) and
Commodity Price Data (The Pink Sheet, accessed 23 August 2021).
Note: Scenario with a 243 per cent freight rate increase compared to no freight rate increase (i.e., same freight rate level as
August 2020) as a percentage of the import or consumer price level. The impacts of the container freight rate surge on prices
are based on a 243 per cent increase in the CCFI between August 2020 and August 2021. See technical note 1 for the detail
of the methodology.
on the extent to which wholesalers and retailers pass on the price increases; concerned about market
share they may choose to absorb the import price increases by reducing their profits.7
In SIDS, the simulated increase is higher than the global average, at 7.5 per cent, because of their
dependence on imports. The increase is also higher in LDCs than the global average at 2.2 per cent,
partially because in high-inflation economies8 firms tend to assume that increases in import prices will be
persistent, and respond by increasing their prices.9 In LLDCs, the increase in consumer prices is lower, at
0.6 per cent, owing to their limited dependence on maritime transport for imports.
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REVIEW OF MARITIME TRANSPORT 2021
Figure 3.9 Simulated impacts of the container freight rate surge on consumer price levels,
by country and by product
By country By product (top 10 products)
EST
Furniture; other manufacturing
SVN Textiles, wearing apparel and
LUX leather products
10.2
MLT CZE
1
BRA USA Machinery and equipment N.e.c. 6.4
100 1 000 10 000
Impact on
GDP (billions of US dollars) consumer prices (%)
Sources: UNCTAD calculations based on the WIOD (accessed 7–8 June 2021) developed by Timmer et al., 2015, Clarksons
Research, Shipping Intelligence Network (accessed 2 September 2021), UNCTADstat (accessed 24 June 2021), and the
Centre d'Études Prospectives and d'Informations Internationales, Gravity Database (accessed 21 May 2021).
Note: The impacts of the container freight rate surge on prices are based on a 243 per cent increase in the CCFI between
August 2020 and August 2021. The simulated impacts on price levels are long-term impacts, i.e., the simulation assumes that
the current container freight rate surge and the corresponding increases in production costs are fully passed to consumers.
See technical note 2 for the detail of the methodology.
Higher freight rates have a greater impact on the consumer prices of some goods than others, notably
those which are more highly integrated into global supply chains, such as computers, and electronic
and optical products (figure 3.9).10 These often have to be shipped from East Asia towards consumption
markets in the West with correspondingly higher shipping costs. For these goods, international shipping
costs account for 2.6 per cent of the consumer price, compared with 1.2 per cent on average for other
goods.11 Higher prices will make such goods less affordable, so reduce consumer welfare.
Other goods for which surging freight rates are likely to increase consumer prices include low-value-added
items such as furniture and textiles, wearing apparel and leather products.12 Production of these goods
is often fragmented across low-wage economies remote from major consumer markets. For example,
international shipping costs account for 2.2 per cent of the consumer price for furniture and 1.8 per cent
for textiles, wearing apparel and leather products.
10
Asia-Pacific Economic Cooperation (APEC), 2021 identified three key global value chain (GVC) industries in the APEC
region based on their high values of GVC-related trade. They are computer, electronic and optical equipment, chemicals,
and motor vehicle, trailers and semi-trailers. Among these three industries, computer, electronic and optical equipment
showed the highest GVC participation rate in the APEC region.
11
World average figures based on the World Input-Output Database (WIOD) used for the simulation. For this calculation (and
the following calculations for furniture and textiles, wearing apparel and leather products), international shipping costs
refer to only direct shipping costs of the final products from producer countries to consumer countries, and do not include
shipping costs to source intermediate goods (i.e., raw materials and parts and components) used in the production
process of the final products.
12
For the purpose of the present analysis, furniture refers to furniture and other manufacturing sectors
(i.e., divisions 31 and 32 in International Standard Industrial Classification, Rev.4, https://unstats.un.org/unsd/publication/
seriesm/seriesm_4rev4e.pdf, accessed 30 July 2021).
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3. Freight rates, maritime transport costs and their impact on prices
Similarly, intermediate products are more strongly embedded in global supply chains than consumer
products. These include raw materials, parts and components, and services used in production processes,
such as banking and consultancy. For the dataset in the simulation, imported goods account for 14.6 per
cent of total intermediate products used in domestic production processes, compared with 9.0 per cent
for consumption products.
The impact is naturally lower for locally produced or assembled goods. Their production costs include
not only the costs of intermediate products but also local value-added components such as labour. In the
dataset used for the present simulation, globally these production factors account on average for 46 per
cent of production costs. However, if the increase in prices triggers wage increases, this would increase
the costs beyond those simulated.
Sustained increases in freight rates will cause greater increases in production costs in smaller economies
and thus undermine their comparative advantages (figure 3.11). Smaller countries will also find it more
difficult to move up the value chain if they face higher costs of importing high-technology machinery and
industrial materials. This will hamper their efforts to achieve the Sustainable Development Goals.
13
In the present analysis, the euro area refers to 16 countries out of 19 euro area countries where all data are available for
the simulation.
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REVIEW OF MARITIME TRANSPORT 2021
Figure 3.12 Simulated dynamic impacts of container freight rate increase on industrial
production
Freight rate (%)
10
7.5
5
2.5
0
0
China
−0.5
−1.0 US
Euro Area
0 20 40 60
Lag (months)
Sources: UNCTAD calculations based on data provided by Clarksons Research, Shipping Intelligence Network
(accessed 3 June 2021), the World Bank, World Development Indicators (accessed 10 June 2021), Bank for International
Settlements, Effective exchange rate indices (accessed 10 June 2021), and Feldkircher et al., 2020 (accessed 10 June 2021).
Note: Global Vector Autoregression, consisting of 8 variables and 31 countries, is estimated using GVAR toolbox 2.0
(Smith and Galesi, 2014). Included endogenous variables for individual countries are the industrial production index, the
consumer price index, the equity price index, the real effective exchange rate index, nominal short-term interest rates, and
nominal long-term interest rates. Global variables are oil prices and container freight rates. See technical note 3 for the detail
of the methodology.
As of July 2021, industrial production in the United States had recovered considerably from the decline
caused by the COVID-19 pandemic in 2020, but remained below the pre-pandemic level despite
strong consumer demand for goods. By early 2021, production in the United States had started to
recover. Nevertheless compared with February 2020, by July 2021, industrial production was 0.1 per
cent lower while real personal consumption expenditure on goods was 14.8 per cent higher.14 15 These
trends are consistent with the simulation for industrial production, suggesting that the container freight
rate surge and the corresponding disruption in maritime transport are delaying a recovery in global
manufacturing.
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3. Freight rates, maritime transport costs and their impact on prices
Figure 3.13 Transport costs for importing goods by transport mode, world, LDCs,
and LLDCs, 2016, percentage of FOB value
% of FOB
14
12 11.6 11.1 10.5
10 9.4 9.7 9.3 9.3
8.5
8 7.6 7.9 7.7 7.7
6.0 6.6 6.1
6 5.6
4.4
4
2.3
2
0
All transport modes Sea Air Road Rail Non-standard
Figure 3.14 Transport costs heatmap for importing goods, all modes of transport, 2016,
percentage of FOB value
Transport cost
(% of FOB value)
5 10 15 20 25 30
Source: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021).
Note: Grey colour indicates countries where import transport costs data are not available.
Transport costs are aggregated by importing country. Importers’ maritime transport costs are summed up over all commodities
and trading partners and, divided by the corresponding sum of the trade value (in FOB), for commodities and country pairs
for which both maritime transport costs and FOB values are available.
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Maritime transport carried 56 per cent of the LDCs’ total imports compared with a world average
of 40 per cent.17
Figure 3.15 Maritime transport costs for importing goods and distances from trading
partners
Based on the granular data Based on the country-level data DEU
MDG
SVN
Maritime transport costs (% of FOB) in 2016
20
Maritime transport costs (% of FOB) in 2016
10 HUN
(% deviation from conditional average)
BGR
MNE CMR
10 MLI SWE
AGO
LAO SVK
0
BRN
ALB
KHM
-10 5
-20 IRL
USA
PAN
-30 3
CHE
300 1 000 3 000 10 000 30 000 3 000 5 000 10 000
Distance from trading partners (km) Average distance from trading partners (km)
Source: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021).
Notes: Left-hand side: The granular data is the bilateral trade data at the HS code 6-digit level. Distances from trading
partners are divided into ten quantile groups. The y-axis shows the percentage deviation of maritime transport costs from
their conditional average based on commodities and trading partners (obtained as residuals from a regression of maritime
transport costs (as percentage of the FOB value) on commodity dummies and trading partner dummies). The boxplot shows
the 25th percentile (lower line), median (middle line), and the 75th percentile (upper line) of maritime transport costs in each
quantile group.
Right-hand side: Importers’ maritime transport costs are summed up over all commodities and trading partners and, divided
by the corresponding sum of the trade value (in FOB), for commodities and country pairs for which both maritime transport
costs and FOB values are available.
In ad valorem terms, maritime transport costs tend to be higher for smaller economies (figure 3.16).
This may be due to the lack of liner shipping connectivity, the lower quality of port infrastructure, and
inadequate trade facilitation measures. These countries would benefit from upgrading their ports to enable
better shipping services, and permit larger vessels with shorter waiting times before entering ports. They
17
The world average of the maritime transport share in terms of FOB value (i.e., 40.2 per cent) is lower than the maritime
transport share in terms of volume (i.e., 85.9 per cent in 2016 according to Clarksons Research, Shipping Intelligence
Network) indicating that goods transported by air and over land have on average a higher price than goods transported
by sea.
18
In the granular data, the elasticity of the maritime transport costs in ad valorem terms with respect to the distance is
estimated at 0.059 after controlling commodity and trading partner fixed effects (and 0.028 without the fixed effects), and
it is statistically different from zero at a significance level of 1 per cent. In contrast, in the country level data, the estimated
elasticity is -0.091 and it is not statistically different from zero at a significance level of 10 per cent.
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3. Freight rates, maritime transport costs and their impact on prices
Figure 3.16 Maritime transport costs for Figure 3.17 Impact of structural
importing goods, by country determinants on maritime
and size of economy transport costs for importing
goods
10 SVN
HUN Impacts on maritime transport costs (%)
SWE
MLI Quality Trade Direct liner
BGR of port facilitation shipping
Maritime transport costs (% of FOB) in 2016
would also benefit from introducing paperless systems for trade facilitation, as well as from more direct
liner shipping connections to reduce the need for transhipping containers.
The consequence of improving these determinants – from their 25th percentiles to 75th percentiles – is
illustrated in figure 3.17. Improving the quality of port infrastructure would reduce world average maritime
transport costs by 4.1 per cent, better trade facilitation measures by 3.7 per cent, and better liner shipping
connections by 4.4 per cent (technical note 4). In LDCs, the greatest benefits would come from better trade
facilitation, with a decrease of 8.6 per cent compared with 0.7 per cent from better port infrastructure.19
It should be noted that these impacts are measured at border-to-border prices. As these transport costs
determinants (quality of port infrastructure, trade facilitation measures, and liner shipping connection)
would also reduce border-to-door transport costs, changes in total transport costs (door-to-door transport
costs) can be expected to be higher than the changes in the border-to-border transport costs.
19
Among trade facilitation measures, cross paperless trade and trade facilitation institution are estimated to have higher
impacts in LDCs. Improving cross paperless trade and trade facilitation institution from the 25th percentile to 75th percentile
is associated with a reduction in maritime transport costs by 8.8 per cent and 7.6 per cent, respectively.
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REVIEW OF MARITIME TRANSPORT 2021
Figure 3.18 Maritime transport costs Figure 3.19 Impacts of trade imbalance
by direction of the trade and trade volume on
imbalance maritime transport costs
Maritime transport costs per unit of goods Maritime transport costs per unit of goods
(% deviation from conditional averages) (% change)
2 0.5 0.3
1.5 1.4 0
1 -0.5
0.5 -1
0 -1.5
-0.5 -2
-1 -2.5
-1.0
-2.6
-1.5
-3
Negative Positive 10% increase 10% increase
trade imbalance trade imbalance in trade imbalance in trade volume
Source: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021).
Notes: Figure 3.18: The figure shows the median of maritime transport costs in the sample of positive trade imbalances and
the sample of negative trade imbalances. Maritime transport costs are percentage deviations from conditional averages based
on commodities and bilateral country pairs (i.e., residuals from the regression of maritime transport costs (per unit of goods)
on commodity dummies and bilateral country pair dummies). Differences in measurement unit of goods volume are controlled
by the commodities dummies.
Figure 3.19: The figure shows the estimated elasticities (multiplied by 10) of maritime transport costs with respect to the trade
(im)balance and the trade volume. See technical note 5 for the detail of the methodology and the data source.
the increase. Thus, if the imbalance increases by 10 per cent, maritime transport costs are expected to
increase by 0.3 per cent (figure 3.19, technical note 5).20
The trade imbalance effect on maritime transport costs can be alleviated by other factors. For example,
boosting cargo volumes to generate economies of scale could help cut maritime transport costs. The role
of economies of scale effect in mitigating high transport costs is also confirmed when looking at the new
transport costs dataset. An analysis based on this dataset shows that a 10 per cent increase in the trade
volume is associated with a 2.6 per cent decrease in maritime transport costs (figure 3.19).
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3. Freight rates, maritime transport costs and their impact on prices
Higher price increases are expected in important products. Globally, prices of computers are simulated
to increase on average by 11 per cent, followed by 10 per cent increases in furniture and textiles, and a
7.5 per cent increase in pharmaceutical products. Some of these are low-value-added items produced in
smaller economies which could face erosion of their comparative advantages.
Higher freight levels are also threatening to undermine a recovery in global manufacturing. In the short to
medium term, a 10 per cent increase in container freight rates could lead to a cumulative contraction of
around 1 per cent in industrial production in the United States and the euro area.
Over the longer term, maritime transport costs are also influenced by structural factors including port
infrastructure quality, the trade facilitation environment, and shipping connectivity. There is potential for
significant improvements that could reduce maritime transport costs by around 4 per cent.
If global trade is to flow more smoothly in future, and ports and maritime transport are to thrive and
navigate through the historic disruption caused by the pandemic, this will require actions in some key
policy areas, to:
• Monitor markets – To ensure a fair transparent and competitive commercial environment,
governments will need to monitor freight rates, as well as fees and charges applied by carriers
and port terminals. Policy makers should strengthen maritime transport competition authorities so
that they can better understand market development and provide the requisite regulatory oversight
(UNCTAD, 2021).
• Share information and strengthen collaboration – To enhance transport efficiency and operations
there should be greater collaboration and sharing of data between various stakeholders along the
maritime supply chain, including carriers, ports, inland transport providers, customs and shippers.
• Analyse trends – Relevant organizations, including UNCTAD, should continue to monitor trends in
shipping markets, collect data and deepen their analysis of the structural determinants of transport
costs. They can consider ways of cutting costs, enhancing efficiency and smoothing delivery of
international maritime trade.
• Upgrade ports – To address congestion and ensure efficient and sustainable trade, port operations
should be upgraded by improving infrastructure, and investing in new technology and digital
solutions. Similar efforts should extend to trade facilitation to improve hinterland connectivity,
particular for LDCs, SIDS and LLDCs.
• Move up the value chain – If smaller economies are to be more resilient to external shocks, including
freight rate surges and maritime transport disruptions, they should be able to diversify by graduating
to higher-value-added products.
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REVIEW OF MARITIME TRANSPORT 2021
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TECHNICAL NOTES
c c
where IPI local currency import price index of country c in year t, α is country fixed effects (i.e., dummy
t is
variables for country c), CCFItc-l is container freight rates of country c (i.e., freight rates of the closest trade
lane for country c, to be discussed below) in year t-l, etc-l is the inverse of the nominal effective exchange
rate of country c, wtc-l is foreign prices (i.e., a weighted average of consumer prices of trading partners) of
country c, GDPtc-l is the real GDP of country c, and Comtc-l is global commodity prices in terms of country c’s
local currency unit. For the construction of CCFItc-l, each country is matched with the closest trade lane from
the 12 trade lanes covered in the CCFI. For example, a country in Sub-Saharan Africa region is matched
with the CCFI China-South Africa Freight Index. For etc-l, the inverse of the nominal effective exchange rate
is used in the equation, so that an increase in this variable represents a currency depreciation.
With regard to the impact on consumer prices, the first difference of logarithm of consumer prices is
regressed on country dummies and the first differences of logarithms of import prices, GDP, and lagged
variables.
L L
∆ln CPItc = αc +
∑(γ
l=0
1,l ∆ln IPItc-l + γ2,l ∆ln GDPtc-l) + ∑γ
l=1
3,l ∆ln CPItc-l
c
where CPI t is consumer price index of country c in year t.
The above equations are estimated by OLS based on annual panel data. The import price equation
covers 200 economies from 2003 to 2019, and the consumer price equation covers 198 economies
from 1981 to 2019. As the coefficients (βs and γs) are common to all economies, estimated elasticities
can be interpreted as the world average (simple average). For the estimation at the country group level
(i.e., LDCs, LLDCs, and SIDS), the estimation samples are restricted to the respective country groups. For
the import price equation, the sample sizes are 44 economies for LDCs (out of 46 LDCs), 31 economies
for LLDCs (out of 32 LLDCs), and 42 economies for SIDS (out of 58 SIDS). For the consumer price
equation, the sample sizes are 43 economies for LDCs, 31 economies for LLDCs, and 42 economies
for SIDS. Insignificant explanatory variables are dropped from the equations, and consequently the lag
lengths became 1 year for most cases.
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3. Freight rates, maritime transport costs and their impact on prices
(∑ )
3
Data
Import prices, consumer prices, real GDP, container freight rates,
and commodity prices
Unit value indices of imports are reported in the UNCTADstat database (https://unctadstat.unctad.org/
wds/TableViewer/tableView.aspx?ReportId=184185, accessed 2 June 2021). Given that the reported unit
value indices are denominated in US dollars, they are converted to local currency units using market
exchange rates. Data on market exchange rates are retrieved from the IMF, International Financial Statistics
(https://data.imf.org/?sk=4c514d48-b6ba-49ed-8ab9-52b0c1a0179b, accessed 1 June 2021) and
UNCTADstat (https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=117, accessed
1 June 2021). For the 19 Euro area countries, the unit value indices of imports are converted to the former
local currency units (before the Euro) because the dataset for the present analysis starts from 2003, which
is before the adoptions of the Euro in some countries (i.e., Slovenia adopted the Euro in 2007, followed
by Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015).
Consumer price indices (CPI) and real GDP are retrieved from UNCTADstat (https://unctadstat.unctad.
org/wds/TableViewer/tableView.aspx?ReportId=37469 for CPI and https://unctadstat.unctad.org/wds/
TableViewer/tableView.aspx?ReportId=96 for real GDP, accessed 2 June 2021). CCFI composite index
and the individual freight indices for 12 trade lanes are sourced from Clarksons Research, Shipping
Intelligence Network (accessed 2 September 2021).
Commodity prices for energy, non-energy and precious metals are reported in the World Bank, Commodity
Price Data (The Pink Sheet, https://www.worldbank.org/en/research/commodity-markets, accessed
23 August 2021). A simple average of the three indices are converted to local currency units using market
exchange rates above.
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REVIEW OF MARITIME TRANSPORT 2021
(/ )
Wt c,p
Etc Wt c,p
NEERtc
/ c
NEER
t-1
= ∏
p≠c
Etp c
Et-1
Etp-1
/ ∏( / )
c
, wt
c
wt-1
=
p≠c
CPItp
CPItp-1
where NEERtc is the nominal effective exchange rate index of country c in year t, Etc is the market exchange
rate of country c’s currency in US dollars, Etp is the market exchange rate of trading partner p’s currency
in US dollars, and Wtc,p is the total bilateral trade value (i.e., the sum of the bilateral export value and the
bilateral import value) between country c and trading partner p. For the right-hand side equation, wtc is the
foreign price index of country c in year t, CPItp is the consumer price index of trading partner p, and Wtc,p is the
bilateral import value of country c from trading partner p.
An increase in the nominal effective exchange rate index represents an appreciation of the country c’s
currency. In the estimation, the inverse of the nominal effective exchange rate index is used, so that an
increase in this variable represents a currency depreciation.
The total bilateral trade value (i.e., Wtc,p) and the bilateral import value (i.e., Wtc,p) are the average of the
data reported by country c and trading partner p. If only either country c’s or trading partner p’s data is
available, only the available data is used. If both data are not available, the missing value is imputed by the
average of the previous and next year’s values. Data on bilateral trade values and bilateral import values
are retrieved from the IMF, Direction of Trade Statistics (https://data.imf.org/?sk=9D6028D4-F14A-464C-
A2F2-59B2CD424B85, accessed 1 June 2021) and the World Bank, World Integrated Trade Solution
(https://wits.worldbank.org/, accessed 2 June 2021). The data on market exchange rates (i.e., Etc and Etp )
is the same data used in the calculation of import prices in local currency units (i.e., sourced from the
International Monetary Fund, International Financial Statistics and UNCTADstat). Also, the data on trading
partners’ consumer price indices (i.e., CPItp) is the same data used as the dependent variable in the
consumer price equation (i.e., sourced from UNCTADstat).
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3. Freight rates, maritime transport costs and their impact on prices
η = Δ (Bt [b + ʋ + d]) = Bt Δb
where η is a column vector whose element ηic represents an elasticity of the production cost of product i
in country c with respect to freight rates, Bt = {[I-A]-1 }t is the Leontief inverse matrix, I is an identity matrix
(i.e., a square matrix with ones on the diagonal and zeros elsewhere), A = (aj,ip,c) is the technical coefficient
matrix and its element aj,ip,c = Zj,ip,c/ Xic represents the share of the input of product j produced in country p
into the production of product i in country c (i.e., j,i Z p,c ) in the total input for the production of
product i in country c (i.e., Xi ), b is a column vector whose element bic = IntTTMic / Xi c represents the ratio of
c
the international transport margins involved in the production of product i in country c (i.e., IntTTMic )
over the total input for the production of product i in country c (i.e., Xic ), ʋ is a column vector whose
element ʋic = VAic / Xic represents the ratio of the value added (i.e., labour costs and capital costs) involved
in the production of product i in country c (i.e., VAic ) over the total input for the production of product i in
country c (i.e., Xic), and d is a column vector whose element dic = τic / Xic represents the ratio of the indirect
taxes less subsidies (i.e., import tariffs) involved in the production of product i in country c (i.e., τic) over the
total input for the production of product i in country c (i.e., Xic).
The difference operator Δ represents element by element difference of a matrix/vector induced by a one
per cent increase in container freight rates. Among the four matrices/vectors in the equation, i.e., Bt, b, ʋ,
and d, only the shares of the international transport margins (i.e., b) are assumed to change. The share of
transport margins involved in the production of product i in country c (i.e., bic) is assumed to increase by
one per cent if all imported products used in the production of product i in country c (i.e., Zj,ip,c for all j,p)
are fully containerized. If some imports are partially containerized, the transport margins of these products
are assumed to increase by the containerized ratio divided by 100. Therefore, the change in the share of
the international transport margins is calculated by the following formula:
∆bic =
∑ j,p [
Zj,ip,c × R_IntTTMjp,c ×
CRjp,c
100 ]
where bic = ∑j,p [Zj,ip,c × R_IntTTMjp,c] is the share of international transport margins involved in the production
of product i in country c, R_IntTTMjp,c is the ratio of the international transport margins of product j’s import
from country p to country c over the import value of product j from country p to country c, and CRjp,c is the
containerized ratio of product j’s import from country p to country c. The containerized ratio is calculated
by the following formula:
CRjp,c =
∑hϵj MIMPhp,c 1containerized(h)
/ ∑hϵj IMPhp,c
where MIMPhp,c is the maritime import value of commodity h (in product group j) from country p to
country c, IMPhp,c is the total import value of commodity h (in product group j) from country p to country c,
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REVIEW OF MARITIME TRANSPORT 2021
and 1containeriezed is an indicator function which equals to one if commodity h is containerized and zero
otherwise. The commodity h is considered as containerized according to the definitions used in the OECD
Maritime Transport Cost database (see Appendix Table II.3. in Korinek, 2011).
In the second step, the elasticity of the final user prices (i.e., prices for consumers and firms) at the country
and product level are estimated by summing the elasticity of the production costs ηip (estimated above)
and the increase in the international transport margins for importing the product:
CRip,c
ζip,c = ηip + ∆R_IntTTMip,c = ηip + R_IntTTMip,c ×
100
where ζip,c is the elasticity of the final user price of product i imported from country p to country c, ηip
is the elasticity of production cost of product i in country p, and ∆R_IntTTMip,c is the change in the
international transport margin ratio of product i’s import from country p to country c induced by a one per
cent increase in container freight rates. If product i is fully containerized, the international transport margin
ratio is assumed to increase by 1 per cent. Otherwise, the international transport margin ratio is assumed
to increase by the containerized ratio divided by 100 (i.e., CRip,c/100).
In the final step, the elasticity of the final user price and the elasticity of the production cost at the country
and product level are aggregated to the country or product level using the final demand amounts or output
values as weights:
ζc = ∑ i,p
ζip,c fip,c , ζi = ∑ c,p
ζip,c fip,c , ζglobal = ∑ i,c,p
ζip,c fip,c , ηc = ∑η X
i
i
c
i
c
where ζc is the aggregated elasticity of final user prices in country c, ζi is the global elasticity of the final
user price of product i, ζglobal is the global level elasticity of final user prices, ηc is the aggregated elasticity
of production costs in country c, fip,c is the final demand of country c for product i produced in country p,
and Xic is output of product i in country c. If the final demand vector fc = (fip,c) is the consumption of
country c, the elasticity of final user prices (i.e., ζc) becomes the elasticity of consumer prices. The elasticities
of import prices, investment-related product prices, and intermediate product prices are calculated by
replacing the final demand vector by the respective demand vector.
Simulation
The impacts of the current container freight rate surge on prices and production costs at the country or
product level are calculated by multiplying the aggregated elasticities by the changes in the CCFI level
between the two scenarios:
( ) ( )
Composite Composite
CCFIlong CCFIAugust 2021
ζc × Composite*
× Adj - 1 c
:= ζ ×
Composite
× Adj - 1
CCFIlong CCFIAugust 2020
Composite
where CCFIlong is the level of the CCFI Composite Index in the “long-term” under the container freight
Composite*
rate surge scenario (i.e., 3027.91 points in August 2021), CCFIlong is the level of the CCFI Composite
Index in the “long-term” under the no container freight rate surge scenario (i.e., 884.02 points in
August 2020), and Adj is an adjustment factor to convert changes in the CCFI to changes in international
transport margin. Adj is calibrated by aligning changes in total international transport margin implied
by the current simulation with changes calculated from a regression analysis at macroeconomic level
(i.e., total international transport margin is regressed on the CCFI, and the estimation result is used for the
extrapolation). The aggregated elasticity of final user prices at the country level (i.e., ζ c ) is replaced by the
elasticity at the product level (i.e., ζi), at the global level (i.e., ζ global), or the elasticity of production costs
at the country level (i.e., ηc ) when impacts on product level final prices, global level final prices or country
level production costs are calculated.
Data
The estimation of the elasticities of prices and production costs at the country or product level is mainly
based on the World Input-Output Database (WIOD, http://www.wiod.org/home, accessed 7-8 June 2021)
developed by Timmer et al., 2015. The WIOD covers 43 countries (i.e., 28 EU countries and 15 other
major countries) and 56 sectors. The calculation of the containerized ratio is based on the bilateral trade
data by transport mode (the GTCDIT) retrieved from the UNCTADstat (https://unctadstat.unctad.org/
EN/TransportCost.html, accessed 24 June 2021). The data on CCFI Composite Index is sourced from
Clarksons Research, Shipping Intelligence Network (accessed 2 September 2021).
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3. Freight rates, maritime transport costs and their impact on prices
Estimation
The regression is based on the global vector autoregression (GVAR) model developed by Pesaran
et al., 2004. The GVAR consists of a set of vector autoregression (VAR) models at the individual country
level:
pi qi qi
xi,t = ai,0 + ai,1 t +
∑Φ x
l=1
i,l i,t-l + Λi,0 x*i,t + ∑Λ x
l=1
i,l
*
i,t-l + Ψi,0 ωt + ∑Ψ ω
l=1
i,l t-l + ui,t
pω qω
ωt = μ0 + μ1 t + ∑
l=1
Φω,l ωt-l + ∑Λ
l=1
ω,l x*ω,t-l + ηt
N N
x*i,t = ∑w x
j≠i
i,j j,t , x*ω,t =
j=0
∑w ω,j xj,t
where xi,t = (yi,t , πi,t , eqi,t , eri,t , sri,t , lri,t)t are the country-specific endogenous variables of country i in
time t, x*i,t = (yi,t* , πi,t* , eqi,t* , eri,t* , sri,t* , lri,t*)t are the foreign variables (i.e., weighted average of foreign
countries’ endogenous variables) for country i, ωt = (ptoil , ptfreight)t are the global variables common for
all countries, wi,j is the weight on country j’s endogenous variables for constructing country i’s foreign
N
variables such that ∑j≠i wi,j = 1, wω,j is the weight on country j’s endogenous variables for constructing
feedback variables for the global variables such that ∑j=0 N
wω,j = 1, and ui,t are cross sectionally weekly
correlated error terms. yi,t is the industrial production, πi,t is the consumer inflation, eqi,t is the real equity
price, eri,t is the real effective exchange rate, sri,t is the nominal short-term interest rate, lri,t is the nominal
long-term interest rate, ptoil is the oil price, and ptfreight is the freight rate. All variables are in levels and, with
the exception of the interest rates, in logarithmic transform. Data on industrial production and consumer
prices are seasonally adjusted.
In the country i’s VAR model, ai,0 is the intercept term, ai,1 is the coefficient on the time trend term, Φi,l is
the matrix of coefficients on the lagged endogenous variables, Λi,0 is the matrix of coefficients on the
contemporaneous foreign variables, Λi,l is the matrix of coefficients on the lagged foreign variables, Ψi,0
is the matrix of coefficients on the contemporaneous global variables, and Ψi,l is the matrix of coefficients
on the lagged global variables. In the VAR model for the global variables (i.e., the dominant unit model
with the feedback effects), μ0 is the intercept term, μ1 is the coefficient on the time trend, Φω,l is the
matrix of coefficients on the lagged global variables, and Λω,l is the matrix of coefficients on the lagged
feedback variables. The lag orders in the individual countries’ VAR models and the dominant unit model
(i.e., pi, qi, pω, and qω) are determined by the Akaike Information Criterion (AIC). The individual countries’ VAR
models and the dominant unit model are estimated using the GVAR toolbox 2.0 (Smith and Galesi, 2014).
Simulation
An impulse response analysis is conducted to simulate the impact of freight rate increases on the industrial
production. The impact of the one standard deviation shock in freight rates is calculated by the generalized
impulse response functions using the GVAR toolbox 2.0 (Smith and Galesi, 2014).
Data
The present analysis covers 31 major economies in the world (i.e., 24 countries in the EU-27 and
7 other major countries). The primary data source for the six endogenous variables (i.e., industrial
production, consumer inflation, real equity prices, real effective exchange rate, nominal short-term
interest rate, and nominal long-term exchange rate) is a dataset constructed by Feldkircher et al., 2020
(accessed 10 June 2021).
The other data sources used in the analysis are as follows: For the real effective exchange rates, the
monthly real effective exchange rate indices (broad indices) calculated by the Bank for International
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REVIEW OF MARITIME TRANSPORT 2021
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3. Freight rates, maritime transport costs and their impact on prices
where Costic,p is the maritime transport costs (per cent of FOB value) for importing commodity i (at the
HS code 6-digit level) from country p to country c, αi is the commodity fixed effects, αp is the partner
country (i.e., exporting country) fixed effects, xc is a transport costs determinant of country c, and Distc,p
is the distance between country c and p. The country c’s fixed effects are not included in the regression
because they will cause the multicollinearity problem if they are included together with the transport
costs determinants of country c. Only one transport costs determinant (i.e., either the quality of port
infrastructure, trade facilitation measures, or the direct liner shipping connectivity) is included in the above
equation at the same time to avoid the multicollinearity problem. The regression is run for each of the
transport costs determinants to estimate the respective elasticity β.
When estimating the elasticities for the LDCs subsample, the equation is augmented to include an
interaction term between the transport costs determinants and the dummy variable for the LDCs:
Simulation
To simulate the impacts of improving the structural determinants on maritime transport costs, the
estimated elasticities are multiplied by the difference between the 25th percentile and the 75th percentile
of the structural determinant: β × (x75th - x 25th), where x zth is the zth (i.e., 75th or 25th) percentile of one of
the transport costs determinants (i.e., the quality of port infrastructure, trade facilitation measures, or the
direct liner shipping connectivity). In the simulation for the LDCs subsample, the formula is modified as
follows: (β + δ) × (x75th - x25th).
Data
The maritime transport costs in 2016 at the commodity and bilateral country level are based on the
Global Transport Costs Dataset for International Trade (GTCDIT, https://unctadstat.unctad.org/EN/
TransportCost.html, accessed 24 June) developed by UNCTAD, the World Bank, and Equitable
Maritime Consulting. The maritime transport costs in ad valorem terms are calculated by the following
formula: (CIFic,p - FOBic,p) / FOBic,p, where CIFic,p is the CIF value of commodity i’s imports from country p
to country c, and FOBic,p is the corresponding FOB value. The distance between the exporting country
(i.e., country p) and the importing country (i.e., country c) is also recorded in GTCDIT.
The quality of port infrastructure is assessed in the Global Competitiveness Report published by the World
Economic Forum. The score ranges from 1 (i.e., extremely underdeveloped) to 7 (i.e., well developed and
efficient by international standards). The data for 2015-2016 are retrieved from the World Bank, TCdata360
(https://tcdata360.worldbank.org/indicators/IQ.WEF.PORT.XQ?country=BRA&indicator=1754&viz=line_
chart&years=2007,2017, accessed 24 June). The data on trade facilitation measures are sourced
from the UN Global Survey on Digital and Sustainable Trade Facilitation conducted by the UN Regional
Commissions (https://www.untfsurvey.org/, accessed 24 June). The total trade facilitation score in 2015
is used in the analysis in the main text. The impacts of the five main individual scores (i.e., cross-border
paperless trade, paperless trade, institutional arrangement and cooperation, formalities, and transparency)
are also assessed and reported in relevant footnotes. For liner shipping connectivity, the number of directly
connected countries in the liner shipping network (i.e., called degree centrality in the network analysis
literature) is calculated based on a dataset provided by MDS Transmodal. Unlike the other two transport
costs determinants, the logarithmic form is used for the estimation and simulation.
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where Costic,p is the maritime transport costs (per quantity unit of goods) for importing commodity i from
country p to country c, αi is the commodity fixed effects, αc,p is the bilateral country pair fixed effects,
LBalanceic,p is the log of the trade balance of commodity i between country c and country p, and Volumeic,p
is the import volume of commodity i from country p to country c. The unit of the goods quantity used
in the variables Costic,p and Volumeic,p is different by commodity. For example, the quantity of tomatoes
is measured in kilograms while the quantity of textile wallcoverings is measured in square meters. The
difference in the measurement unit is controlled by the commodity fixed effects αi in the regression.
Also, the impacts of the distance and the transport costs determinants analyzed in section E.2 (i.e., the
quality of the port infrastructure, trade facilitation measures, and the direct liner shipping connections) are
controled by the bilateral country pair fixed effects αc,p in the present analysis.
The estimated elasticities, β and γ, are multiplied by 10 in figure 3.19. β represents the trade imbalance
effect, and γ represents the economies of scale effect. It should be noted that the estimated economies of
scale effect can be overestimated due to the reverse causality stemming from the trade promotion effect
of low transport costs.
Data
All the variables used in the regression are based on the Global Transport Costs Dataset for International
Trade (https://unctadstat.unctad.org/EN/TransportCost.html, accessed 24 June) developed by UNCTAD,
the World Bank, and Equitable Maritime Consulting. The number of observations in the regression is
763,352 after selecting observations where the maritime trade value on the opposite direction is available.
The maritime transport costs per quantity unit of goods, Costic,p, are calculated by the following
formula: (CIFic,p - FOBic,p) / Volumeic,p, where CIFic,p is the CIF value of commodity i’s imports from country p
to country c, and FOBic,p is the corresponding FOB value. The log of the trade balance, LBalanceic,p, is
calculated by the following formula: LBalanceic,p = log(Valueic,p) - log(Valueip,c), where Valueic,p is the
import value (in terms of FOB) of commodity i from country p to country c, and Valueip,c is the trade value
of commodity i in the opposite direction (i.e., from country c to country p).
86
This chapter provides key performance indicators based
on a growing wealth of data derived from satellite tracking
4
of vessels, shipping schedules, and port information
platforms. Analysis of these data can help both users
and providers of port and shipping services to compare
progress and options and improve the efficiency of
international maritime transport. The chapter has four
sections.
PORT OPERATIONS
Larger ships and fewer port calls The fastest loading operation
are two sides of the same coin
Ship sizes have increased faster than trade volumes 25 Brazil 90 Kuwait
and total deployed capacity
Figure 4.1 Port calls per half year, world total, 2018–2020
1 000 000
900 000
800 000
700 000
600 000
500 000
400 000
300 000
200 000
100 000
0
S1 2018 S2 2018 S1 2019 S2 2019 S1 2020 S2 2020
Liquefied natural gas carriers Liquefied petroleum gas carriers Liquid bulk carriers
Dry breakbulk carriers Dry bulk carriers Container ships
Source: UNCTAD, based on data provided by MarineTraffic.
Ships of 1,000 GT and above. Not including passenger and Ro/Ro ships.
Figure 4.2 Port calls per half year, regional totals, 2018–2020
Europe
Northern America
100 000
50 000
0 Oil and gas carriers Dry bulk carriers Dry breakbulk carriers Container ships
Source: UNCTAD, based on data provided MarineTraffic.
Note: Cargo carrying ships only, not including passenger ships and Ro/Ro vessels.
1
UNCTAD secretariat calculations, based on data provided by MarineTraffic (www.marinetraffic.com). Aggregated figures
are derived from the fusion of AIS information with port mapping intelligence by MarineTraffic, covering ships of 1,000 GT
and above. For the computation of the turnaround times, passenger ships and RoRo ships are not included. Only arrivals
have been taken into account to measure the number of port calls. Cases with less than ten arrivals or five distinct vessels
on a country level per commercial market as segmented, are not included. The data will be updated semi-annually on
UNCTAD’s maritime statistics portal (http://stats.unctad.org/maritime).
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During 2020, to contain the virus, terminal operators, authorities, and intermodal transport providers took
steps to reduce social contact. However, this also slowed port operations so that vessels of all types
had to spend more time in port (table 4.1). The greatest average increase in lengths of stay was for dry
break bulk carriers whose general cargo operations tend to be more labour intensive and less automated.
Moreover, when berth space is limited operators may prioritize scheduled container shipping calls or large
dry bulk carriers over smaller vessels.
Table 4.1 Time in port, age, and vessel sizes, by vessel type, 2020, world total
Average Maximum Average
Median cargo cargo container
Median time in Average carrying carrying carrying
time in port, % size Average Maximum capacity capacity capacity (TEU)
port (days), change (GT) of age of size (GT) (dwt) per (dwt) of per container
Vessel type 2020 over 2019 vessels vessels of vessels vessel vessels ship
Container ships 0.71 2.3 38 308 14 237 200 3 543
Dry break bulk carriers 1.15 4.3 5 439 21 91 784 7 405 116 173
Dry bulk carriers 2.07 2.7 32 146 14 204 014 57 453 404 389
Liquefied natural gas carriers 1.12 0.8 95 270 12 168 189 74 229 156 000
Liquefied petroleum gas carriers 1.04 3.0 10 826 15 59 229 12 164 64 220
Wet bulk carriers 0.97 3.9 15 704 14 234 006 27 242 441 561
All ships 1.00 2.9 14 663 18 237 200 24 956 441 561 3 543
Among the top 25 countries with the most container ship arrivals, the fastest median turnaround time was
in Japan at 0.34 days, followed by Taiwan Province of China at 0.44 days, Hong Kong, China, at 0.52 days
and China and Turkey both at 0.62 days (table 4.2). The longest average time in port was in the Russian
Federation at 1.31 days, followed by Belgium at 1.04 days, the United States at 1.03 days and Indonesia
at 0.99 days. For the container ships calling in its ports, the Russian Federation also recorded the highest
average age and the smallest average size.
Figure 4.3 is a stylized map of port calls. It depicts container ship port calls per country, as well as
the median time in port. Figure 4.4 does the same for container ship port calls and the maximum size
of ship. Figure 4.5 and figure 4.6 zoom in on the same details for African countries. These figurative
maps illustrate the importance of Asian economies. They also show that countries with more port calls
tend to receive larger ships, while small island states can only accommodate fewer and smaller vessels.
Figure 4.3 Container ship port calls and time in port, 2020
Median time at port
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4. Key performance indicators for ports and the shipping fleet
Table 4.2 Port calls and median time spent in port, container ships, 2020, top 25 countries
Median time Average age Average container Maximum container
Number of in port of vessels carrying capacity carrying capacity
Country arrivals (days) (years) (TEU) per vessel (TEU) of vessels
China 74 413 0.62 12 4 637 23 964
Japan 37 959 0.34 13 1 620 18 400
Republic of Korea 21 461 0.64 13 3 056 23 964
United States of America 18 866 1.03 14 5 347 22 000
Taiwan Province of China 16 621 0.44 14 2 665 23 964
Malaysia 15 875 0.80 14 3 706 23 756
Indonesia 15 019 0.99 14 1 509 14 855
Singapore 14 946 0.80 12 5 228 23 964
Spain 14 321 0.66 14 3 258 23 756
Hong Kong, China 11 976 0.52 13 3 637 23 964
Netherlands 11 595 0.80 14 2 942 23 964
Turkey 11 594 0.62 16 3 034 19 462
Viet Nam 9 587 0.90 13 1 966 18 400
Thailand 8 107 0.67 11 2 177 23 656
Italy 7 929 0.92 16 3 886 23 756
India 7 865 0.92 15 4 225 14 500
United Kingdom 7 834 0.73 15 3 465 23 964
United Arab Emirates 7 612 0.95 16 4 232 23 964
Brazil 7 609 0.77 10 5 877 12 200
Germany 7 139 0.98 13 4 442 23 964
Belgium 5 235 1.04 14 4 652 23 964
Philippines 5 181 0.89 15 1 858 6 622
Panama 4 467 0.69 12 4 139 14 414
Morocco 4 317 0.74 14 4 094 23 756
Russian Federation 4 184 1.31 18 1 509 9 400
Subtotal, top 25 351 712
World total 459 417 0.71 14 3 543 23 964
Figure 4.4 Container ship port calls and maximum ship sizes, 2020
Maximum vessel size in TEU
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Figure 4.5 Container ship port calls Figure 4.6 Container ship port calls
in Africa and time in port, in Africa and maximum
2020 ship sizes, 2020
Source: UNCTAD, based on data provided by MarineTraffic. Source: UNCTAD, based on data provided by MarineTraffic.
Note: Ships of 1,000 GT and above. Note: Ships of 1,000 GT and above.
The longest times in port are generally in Africa – notably in Nigeria, Sudan, and Tanzania – though
Morocco is an exception with one of the world’s shortest times.
Large ships with more cargo to be loaded or unloaded will normally require longer in port, though ports
that can handle larger ships also tend to be more modern and better equipped, so can work more quickly
and this is therefore a non-linear relationship (figure 4.7).
Some of the fastest turnarounds are in countries that have very few port calls and only receive ships with
a few containers to be loaded and unloaded, so there is little congestion. However, at the other end of the
scale, turnarounds are also fast in countries that have many port calls and can accommodate the largest
container vessels. These ports benefit from economies of scale and investments in the latest technologies
and infrastructure; their efficiency in turn attracts more vessels, further boosting the number of arrivals.
Figure 4.7 Median time in port, number of port calls, and maximum vessel sizes, per
country, container ships, 2020
8 days
Maximum vessel
size (TEU)
4 days 1 000
Median time in port
5 000
10 000
2 days
15 000
20 000
1 day
0.50 day
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4. Key performance indicators for ports and the shipping fleet
Countries in the middle of the distribution report a wide range of median times, reflecting differences in
efficiency and other variables such as vessel age and cargo throughput.
Figure 4.8 Liner shipping connectivity index, top 10 countries, first quarter 2006 to second
quarter 2021
180
China
Singapore
160 Republic
of Korea
Malaysia
140 Hong Kong,
China
United States
120
Spain
Netherlands
100 United
Kingdom
Belgium
80
60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Q1 Q2
Source: UNCTAD, based on data provided by MDS Transmodal. For the complete data set for all countries see
http://stats.unctad.org/LSCI.
2
UNCTAD developed the Liner Shipping Connectivity Index (LSCI) in 2004. The basic concepts and major trends are
presented and discussed in detail in (UNCTAD, 2017) and (MDST, 2020).
In 2019, the LSCI, in collaboration with MDS Transmodal (https://www.mdst.co.uk) was updated and improved,
comprising additional country coverage including several SIDS, and incorporating one additional component, covering
the number of countries that can be reached without the need for transhipment. The remaining five components, notably
the number of companies that provide services, the number of services, the number of ships that call per month, the
total annualized deployed container carrying capacity, and ship sizes, have remained unchanged. Applying the same
methodology as for the country-level LSCI, UNCTAD has generated a new port Liner Shipping Connectivity Index.
Each of the six components of the port LSCI captures a key aspect of a connectivity.
(a) A high number of scheduled ship calls allows for a high service frequency for imports and exports.
(b) A high deployed total capacity allows shippers to trade large volumes of imports and exports.
(c) A high number of regular services from and to the port is associated with shipping options to reach different
overseas markets.
(d) A high number of liner shipping companies that provide services is an indicator of the level of competition in the
market.
(e) Large ship sizes are associated with economies of scale on the sea-leg and potentially lower transport costs.
(f) A high number of destination ports that can be reached without the need for transhipment is an indicator of fast
and reliable direct connections to foreign markets.
Since 2020, the same methodology is applied on the country and the port level on a quarterly basis.
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REVIEW OF MARITIME TRANSPORT 2021
because of the inactivity in the second quarter of a trans-Pacific service of the 2M Alliance which had
deployed ultra-large container carriers.
Of the 25 least-connected economies and territories for which an LSCI has been generated, 18 are
islands whose LSCI scores have not significantly improved over the last 15 years. These are Anguilla,
Antigua and Barbuda, Bermuda, Bonaire, Saint Eustatius and Saba, Cabo Verde, Cayman Islands,
Christmas Island, Cook Islands, Micronesia, Montserrat, Niue, Norfolk Island, Palau, São Tomé and
Príncipe, Saint Kitts and Nevis, Timor-Leste, Turks and Caicos Islands and Tuvalu. Among the bottom 25,
two countries, Moldova and Paraguay, are landlocked so their LSCIs are determined by containerized
river transport services. The remaining five economies are Albania, Democratic Republic of Congo,
Eritrea, Gibraltar and Guinea-Bissau, whose seaborne trade is often handled by ports in neighbouring
countries.
Figure 4.9 Port Liner Shipping Connectivity Index, top 10 ports as of second quarter 2021,
first quarter 2006 to second quarter 2021
150
90 Rotterdam,
Netherlands
Port Klang,
80 Malaysia
Antwerp, Belgium
70
Kaohsiung,
Taiwan, Province
60 of China
50
40
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Q1 Q2
Source: UNCTAD, based on data provided by MDS Transmodal. For the complete data set for all ports see https://unctadstat.
unctad.org/wds/TableViewer/tableView.aspx?ReportId=170026.
94
4. Key performance indicators for ports and the shipping fleet
Figure 4.10 Liner Shipping Connectivity Index, country and port level, 2020
Source: Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University, based on data provided by UNCTAD.
LSCI values are average of all 4 quarters of 2020.
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REVIEW OF MARITIME TRANSPORT 2021
Figure 4.11 Trends in global container ship deployment, first quarter 2006 to second
quarter 2021
Companies Maximum vessel size (TEU) Direct connections Total deployed capacity (TEU)
average per country global average per country average per country
20 35 7 000 000
18 25 000
30 6 000 000
16
20 000 25 5 000 000
14
12
20 4 000 000
15 000
10
15 3 000 000
8
10 000
6 10 2 000 000
4 5 000
5 1 000 000
2
0 0 0 0
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Companies Maximum vessel size (global) Direct connections Total deployed capacity
Weekly calls Maximum vessel size (TEU) Services Deployed capacity per company (TEU)
average per country average per country average per country average per country
40 45 500 000
0 0 0
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Calls per week Maximum vessel size Services TEU deployed per company
The relationship between total deployed container carrying capacities, ships sizes, and the number of
companies in a market is further illustrated in figure 4.13. Moving vertically in the chart, for a given number
of companies in a market, the total deployed capacity – how many containers can be carried to or from
96
4. Key performance indicators for ports and the shipping fleet
Figure 4.12 Trends in vessel sizes and number of companies providing services, selected
countries, first quarter 2006 to second quarter 2021
Companies Maximum vessel size (TEU) Companies Maximum vessel size (TEU)
Chile Chile Germany Germany
14 000
25
80 20 000
12 000
20
10 000
60 15 000
15 8 000
40 10 000
6 000
10
4 000
20 5 000
5
2 000
0 0 0 0
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Companies Maximum vessel size Companies Maximum vessel size
Companies Maximum vessel size (TEU) Companies Maximum vessel size (TEU)
China China Samoa Samoa
120 12 2 000
25 000
1 800
100 10
1 600
20 000
1 400
80 8
1 200
15 000
60 6 1 000
10 000 800
40 4
600
5 000 400
20 2
200
0 0 0 0
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
a country – increases with maximum vessel size. For each country, however, there is a trade-off between
accommodating more companies or receiving larger ships: moving horizontally in the chart, for a given
deployed capacity, the bigger ships are in countries with fewer companies in their markets.
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Figure 4.13 Relationship between maximum vessel sizes, deployed capacity, and the number
of companies, second quarter 2021
100 000 000
Total deployed capacity
annual, TEU
1 000 000
100 000
10 000
Companies
1 000
0 1 10 100
Source: UNCTAD, based on data provided by MDS Transmodal.
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4. Key performance indicators for ports and the shipping fleet
Figure 4.14 Liner Shipping Bilateral Connectivity Index (LSBCI) and its components, first
quarter 2006 to second quarter 2021
.178 .18 .182 .184 .186 .188 LSBCI Transhipment Common Direct
.07
.065
Index
.06
.055
.05
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
.12
.013 .0135 .014 .0145 .015
.1
Index
.08
.06
.04
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
All in all, the LSBCI trend reflects a worsening Table 4.3 Top 25 ports under the World
situation for remote and already poorly Bank IHS Markit Container
connected countries. Added to this is the Port Performance Index 2020
general increase in freight costs which could Port name Economy Rank
have severe consequences for international trade Yokohama Japan 1
(UNCTAD, 2021a). King Abdullah port Saudi Arabia 2
Chiwan China 3
Guangzhou China 4
C. PORT CARGO HANDLING Kaohsiung Taiwan Province of China 5
PERFORMANCE Salalah Oman 6
Hong Kong Hong Kong, China 7
Qingdao China 8
1. Container port performance Shekou China 9
In April 2021, to provide stakeholders with a Algeciras Spain 10
reference point for maritime trade and transport Beirut Lebanon 11
the World Bank and IHS Markit published a new Shimizu China 12
index, the Container Port Performance Index Tanjung Pelepas Malaysia 13
Port Klang Malaysia 14
(CPPI) (World Bank 2021, IHS Markit 2021). This
Singapore Singapore 15
index combines data on vessels, their port calls
Nagoya Japan 16
and the cargos they load and unload, as well as
Colombo Sri Lanka 17
the time they spend in ports.
Sines Portugal 18
The first version had data for 2019 and the first half Kobe Japan 19
of 2020 (table 4.3), and was dominated by ports in Zhoushan China 20
East Asia, led by Yokohama in Japan, which was Jubail Saudi Arabia 21
ahead of King Abdullah Port in Saudi Arabia and Yosu Republic of Korea 22
Qingdao in China. In Europe, the highest-ranked Fuzhou China 23
port was Algeciras in Spain at 10; in South Ningbo China 24
Asia, it was Colombo in Sri Lanka at 17; and Lazaro Cardenas Mexico 25
in the Americas, Lazaro Cardenas in Mexico at 25. Source: World Bank and IHS Markit Port Performance Program.
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The only other North American port in the top 50 was Halifax in Canada. In Africa, the top-ranked port
was Djibouti.
UNCTAD has used the raw data from the CPPI to analyse the relationship between the performance of
ports and the time ships spend in them. As indicated in figure 4.15 there are clear economies of scale:
the more containers there are to load and unload – a larger ‘port call size’ – the fewer minutes it takes
to load or unload a container. Nevertheless, total time in port increases with call size (figure 4.16), so it is
reasonable to compare ports or countries within the same range of call sizes.
Port calls where more containers are loaded or unloaded will need longer to handle them, but also be faster
for each individual container move, so the correlation between hours in port and speed of handling a slightly
negative (figure 4.17). But limiting the analysis to one port call range confirms the expected high positive
correlation between the time it takes to move a container and the time it takes to handle a ship (figure 4.18).
For the top 25 economies, table 4.4 summarizes the speed of container handling. For five of the nine
call-size ranges the fastest handling is in Taiwan Province of China, followed by Japan for two ranges, and
Malaysia and Hong Kong, China for one range each. The ranking per country roughly follows that of the
leading individual ports in table 4.3.
Figure 4.15 Minutes per container move for container ships, by range of port call size
9
7
Minutes per container move
0
500 and below 501-1000 1001-1500 1501-2000 2001-2500 2501-3000 3001-4000 4001-6000 6000 and above
Call size (moves)
Source: UNCTAD, based on data provided by IHS Markit Port Performance Program.
Figure 4.16 Time in port (hours) for container ships, by range of port call size
250
200
Time in port (hours)
150
100
50
0
500 and below 501-1000 1001-1500 1501-2000 2001-2500 2501-3000 3001-4000 4001-6000 6000 and above
Call size (container moves)
Source: UNCTAD, based on data provided by IHS Markit Port Performance Program.
100
4. Key performance indicators for ports and the shipping fleet
Figure 4.17 Correlation between time Figure 4.18 Correlation between time
in port (hours) and minutes in port (hours) and minutes
per container move, per container move, only
all call sizes calls with 1001 to 1500
1000 containers per call
70
60
Time in port (hours)
100 50
30
10
20
10
1
0.1 1 10 0 0.50 1.00 1.50 2.00 2.50 3.00
Minutes per container move Minutes per container move
Source: UNCTAD, based on data provided by IHS Markit Source: UNCTAD, based on data provided by IHS Markit Port
Port Performance Program. Performance Program. Coefficient of determination (R2) 0.99.
Table 4.4 Minutes per container move, by range of call size, top 25 countries by port calls
501– 1001– 1501– 2001– 2501– 3001– 4001–
Country\call size <500 1000 1500 2000 2500 3000 4000 6000 >6000
Australia 3.44 2.27 1.84 1.57 1.47 1.31 1.28 1.25 0.81
Belgium 3.71 2.08 1.40 1.10 0.91 0.80 0.73 0.70 0.54
Brazil 3.01 1.96 1.48 1.30 1.16 1.07 0.92
China 2.92 1.68 1.14 0.92 0.77 0.66 0.57 0.49 0.42
Hong Kong, China 3.21 1.60 1.01 0.79 0.77 0.63 0.58 0.45
Taiwan Province of China 2.31 1.25 0.87 0.67 0.58 0.69 0.51
France 3.33 2.21 1.70 1.38 1.27 1.23 1.08 0.89
Germany 4.13 1.92 1.31 1.13 0.96 0.82 0.73 0.65 0.58
India 2.52 1.55 1.22 0.91 0.79 0.75 0.65 0.55
Indonesia 4.22 2.35 2.00 1.45 1.04 1.00 0.80 0.67
Italy 3.55 2.41 1.91 1.54 1.46 1.48 1.44 1.14
Japan 2.57 1.21 1.01 0.80 0.66 0.75 0.70
Republic of Korea 2.88 1.63 1.14 0.89 0.78 0.75 0.65 0.56 0.70
Malaysia 3.83 2.03 1.38 0.98 0.79 0.69 0.55 0.46 0.37
Netherlands 8.14 2.70 1.67 1.44 1.23 0.99 0.80 0.67 0.62
Panama 4.33 1.86 1.36 1.04 0.94 0.96 0.78 0.88 1.23
Philippines 4.67 3.51 2.79 2.29 1.91 1.43 1.42
Singapore 3.87 1.81 1.24 0.95 0.76 0.67 0.59 0.47 0.39
Spain 3.87 1.87 1.29 0.98 0.85 0.72 0.63 0.67 0.48
Thailand 2.69 2.79 1.11 0.94 0.79 0.69 0.70 0.66 0.58
Turkey 3.47 2.03 1.42 1.16 1.09 1.06 0.94 0.64 0.57
United Arab Emirates 6.89 2.41 1.74 1.18 0.85 0.70 0.59 0.52 0.41
United Kingdom 3.79 2.18 1.84 1.53 1.28 1.22 1.27 0.93 0.78
United States 3.16 1.77 1.34 1.16 1.06 1.01 0.93 0.90 0.85
Viet Nam 2.64 1.55 1.13 0.78 0.67 0.64 0.58 0.54 0.52
Average 3.73 2.02 1.45 1.16 0.99 0.91 0.82 0.70 0.62
Median 3.47 1.96 1.36 1.10 0.91 0.80 0.73 0.66 0.57
Minimum 2.31 1.21 0.87 0.67 0.58 0.63 0.51 0.45 0.37
Maximum 8.14 3.51 2.79 2.29 1.91 1.48 1.44 1.25 1.23
Source: UNCTAD, based on data provided by IHS Markit Port Performance Program.
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Box 4.1 Port performance in Latin America and the Caribbean – differences between
types of terminals
In Latin America and the Caribbean across 50 countries and territories, logistics and port services are
provided through 1,967 port facilities. Of these, 1,259 are certified as compliant with the International
Ship and Port Facility Security (ISPS) Code, including 982 facilities that handle cargo or passenger
transfer services, and 277 that provide other services, such as shipyards, docks, and others.
Nonetheless, according to an intensive survey of port facilities in the entire region carried out by the
Economic Commission for Latin America and the Caribbean (ECLAC), there are also another 708, of
which 590 are port terminals and 118 are related to other types of service.
Port terminals, including those that are ISPS certified and those that are not, represents a widely
diverse geographical distribution. The top ten countries according to the number of port terminals
are: Brazil, 306; Mexico, 171; Argentina, 143; Chile and Peru, 97 each; Colombia, 88; Paraguay, 65;
Bolivarian Republic of Venezuela, 63; Panama, 48 and Cuba, 45. These 10 countries, out of 50, make
up 74 per cent of the region’s port facilities.
At the opposite end of the ranking, 15 countries or territories have five or fewer facilities each, and
almost all have no more than one terminal by port specialty: Antigua and Barbuda, Bermuda, Belize,
Barbados, Turks and Caicos Islands, El Salvador, Aruba, Bonaire, Cayman Islands, Dominica, Anguilla,
Montserrat, Sint Eustatius, Saint Barth, and Sint Maarten.
A high proportion of these facilities, 470 in total, are multipurpose terminals. The following chart exhibits
the distribution by zones and specialties:
Bulk
Passenger Terminal Liquid Bulk Dry Bulk
(Liquid
Terminal + Dry) Terminal Terminal
Container 30 70 53
20
Terminal
49 Ro-Ro Multipurpose Passenger Container
Liquid Bulk Terminal 84 Terminal Terminal
Terminal ND 19
273 20 20 29
Bulk Terminal (Liquid + Dry) ND Ro-Ro Terminal
6 3 2
This region is very diverse – in terms of composition, languages, economies, cultural identities, and
modes of adaptation to international instruments. The ports systems too differ in terms of maturity
and productivity. In the liquid and dry bulk categories, in the most specialized countries, productivity
is higher – as in Argentina, Brazil, and Colombia, which move annual volumes close to 600 million mt.
In the last few years region has seen enormous growth in terms of containers, though only four
specialized terminals yet have semi-automated processes. Progress in digitalization and paperless
transactions has also been slow, and regulatory procedures are not very transparent, making it difficult
to promote effective competition. Long-term planning has shown a lack of foresight for ports and
connectivity with hinterland infrastructure
Some areas have weakly regulated quasi-monopolistic markets, while others have excessive
competition, which may prove harmful. Systems for the design, granting and monitoring of concessions
are hampered by institutional weaknesses. These reduce prospects for investment and better
multimodal connections and efficient access to markets and ports. The result is often inefficiency and
low productivity.
Increasing vertical integration between shipping lines, port terminals and inland logistics heightens
the risk of monopoly. In certain areas there are also tensions between management, security, and
facilitation. Better security standards would improve development, efficiency, and competitiveness.
Nonetheless, there is some optimism that these problems can be solved – with considerable potential
for more containerization and automation of procedures, as well as for improvements in facilitation.
Source: ECLAC, Maritime and Logistics Profile.
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4. Key performance indicators for ports and the shipping fleet
Table 4.5 Cargo and vessel handling performance for dry bulk carriers. Top 30 economies
by vessel arrivals, average values for 2018 to first half of 2021
Average waiting to Average waiting to
Ton per minute, Ton per minute, load duration discharge duration
loading discharge (hours) (hours)
China 19 23 66 56
Australia 48 11 101 50
United States 14 11 101 49
Brazil 25 9 174 131
Russian Federation 12 4 64 71
Canada 17 10 117 70
Argentina 16 7 45 28
South Africa 20 9 83 30
Japan 9 18 43 41
India 14 16 73 63
Ukraine 10 11 55 48
United Arab Emirates 18 10 50 32
Indonesia 10 8 58 54
Republic of Korea 10 16 37 62
New Zealand 10 8 56 26
Chile 11 9 94 94
Turkey 6 9 45 50
Viet Nam 9 11 53 54
Colombia 28 7 39 25
Malaysia 11 13 73 90
Mexico 12 9 68 61
Taiwan Province of China 12 18 34 48
Peru 18 11 82 49
Oman 16 20 80 52
Norway 20 6 84 78
France 10 12 52 55
Saudi Arabia 8 6 49 80
Morocco 8 6 78 127
Romania 6 7 64 29
Mozambique 15 6 94 123
4
Data provided electronically by VesselsValue; https://www.vesselsvalue.com, June 2021.
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Ships generally wait longer to load than to unload, though there are significant differences between
countries. In Colombia, the average waiting time for unloading is one day while in Brazil it is five and a half
days. Brazil also has the highest waiting times for loading – on average more than a week. This is partly
a consequence of large vessel sizes and longer distances from the main markets. The shortest waits for
loading cargo are in Taiwan Province of China at 34 hours. Some countries encourage owners to arrive
early to minimize the risk of missing a scheduled port call.
Table 4.6 Cargo and vessel handling performance for tankers. Top 30 countries by vessel
arrivals, average values for 2018 to first half of 2021
Average waiting to
Tons per minute, Tons per minute, Average waiting to discharge duration
loading discharge load duration (hours) (hours)
United States 24 33 54 69
Russian Federation 38 27 46 36
China 23 43 45 77
Brazil 46 29 62 66
Saudi Arabia 86 31 37 47
United Arab Emirates 66 25 65 89
Republic of Korea 29 67 50 48
Singapore 26 39 47 43
India 26 50 54 68
Malaysia 28 33 47 65
Netherlands 14 29 59 56
Indonesia 19 20 50 62
Italy 15 32 47 48
Mexico 25 17 77 83
Nigeria 43 9 53 129
Kuwait 90 54 32 37
Iraq 50 8 42 96
Canada 37 39 47 62
Spain 15 27 39 37
Qatar 95 48 26 63
Japan 37 83 35 28
United Kingdom 36 26 53 51
Turkey 54 30 36 37
Norway 63 36 46 72
Angola 113 25 37 84
Belgium 12 16 75 42
Bolivarian Republic of Venezuela 20 13 105 79
Taiwan Province of China 22 48 36 40
Argentina 20 20 39 38
Greece 15 30 55 43
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4. Key performance indicators for ports and the shipping fleet
Figure 4.19 Carbon dioxide emissions by vessel type, monthly, million tons, 2011–2021
20
18
16
Container
14
Dry bulk carrier
12
Other
10
Oil and product
8 tanker
Liquefied gas
6 tanker
Offshore
4
General cargo
2
0
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
The trends for the world’s fleet over the last decade reflect its changing composition, with a declining
proportion of journeys for general cargo ships and an increasing one for LNG carriers, with correspondingly
higher greenhouse gas (GHG) emissions. In figure 4.19 it is also possible to see the annual downturn in
traffic around February in line with the Chinese New Year especially in the dry bulk and container sector.
More recently this chart also shows the impact of the pandemic. ‘Other’ ships include primarily passenger
ships, including ferries and cruise ships which were worst affected. Container ships, also saw an initial
decline at the outset of the pandemic but subsequently recovered.
5
Data provided electronically by Marine Benchmark; https://www.marinebenchmark.com, June 2021.
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Figure 4.20 Carbon dioxide emissions by flag state, annual, 2011–2020, million tons
140 Panama
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4. Key performance indicators for ports and the shipping fleet
REFERENCES
IHS Markit (2021). New Global Container Port Performance Index (CPPI) Launched by the World Bank
and IHS Markit.
IMO (2018). Initial IMO Strategy on Reduction of GHG Emissions from Ships. MEPC 72/17/Add.1 Annex
11. April. Available at https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/
ResolutionMEPC.304(72)_E.pdf (accessed 24 May 2020).
MDST (2020). Available at https://www.portlsci.com/index.php (accessed 5 July 2020).
UNCTAD (2017). Review of Maritime Transport 2017 (United Nations publication. Sales No. E.17.II.D.10.
New York and Geneva).
UNCTAD (2021a). Container Shipping in Times of COVID-19: Why Freight Rates Have Surged and
Implications for Policy Makers. Policy Brief No. 84. Geneva.
UNCTAD (2021b). Small Island Developing States: Maritime Transport in the Era of a Disruptive Pandemic.
Policy Brief, No. 85. UNCTAD. Geneva.
UNCTAD (2021c). UNCTAD Assessment of the Impact of the IMO Short-Term GHG Reduction Measure
on States, UNCTAD/DTL/TLB/2021/2, UNCTAD. Geneva.
World Bank (2021). Asian Ports Dominate Global Container Port Performance Index.
107
This chapter has been prepared in response to a
request by the UN General Assembly in its resolution
on “International cooperation to address challenges
faced by seafarers as a result of the COVID-19
pandemic to support global supply chains”
(A/RES/75/17), at para. 7.
5
The shipping industry has played a vital role in the
global response to the COVID-19 pandemic – delivering
food, medical supplies, fuel, and other essential goods,
and helping keep global supply chains and commerce
running. This is to a large extent due to the world’s 1.9
million seafarers, who through these extraordinary times
have demonstrated great professionalism and dedication.
Vaccination
Concerted collaborative efforts by industry, governments and
international organizations should ensure that seafarers are
designated as key workers and are vaccinated as a matter of priority
Crew changes
Governments and industry should continue to work together,
including through the Neptune Declaration initiative, and in
collaboration with relevant international organizations, to facilitate
crew changes, in accordance with international standards and in
line with public health considerations
Route deviations
1
2 Charterers and other industry stakeholders should
be flexible in accepting requests from shipping
companies for route deviation to facilitate crew
changes
3
Despite important
international efforts and International legal framework
support, the crew change States and other relevant stakeholders should
crisis has worsened and keep under review the relevant legal
4 framework and ensure that international
seafarers are still facing
serious problems which obligations are respected and implemented
need to be addressed:
Information exchange
Relevant public and private sector stakeholders should continue
their regular exchange of views and best practices on seafarers’
situation and needs
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to medical facilities ashore, emergency medical treatment and, where necessary, emergency repatriation
for seafarers regardless of nationality.
On 21 September 2020, another relevant resolution was adopted by the Maritime Safety Committee of
the IMO – ‘Recommended action to facilitate ship crew change, access to medical care and seafarer
travel during the COVID-19 pandemic’ (IMO, 2020c). The IMO urged governments and relevant national
authorities to engage nationally and internationally in discussions on the implementation of the industry
protocols and consider applying them to the maximum extent possible; designate seafarers as “key
workers” providing an essential service,in order to facilitate safe and unhindered movement for embarking
or disembarking a vessel; consider temporary measures including (where possible under relevant law)
waivers, exemptions or other relaxations from any visa or documentary requirements that might normally
apply to seafarers; encourage the use of prevention measures, such as tests on crews before embarkation
and provide seafarers with immediate access to medical care ashore.
In response, echoing the above calls, in January 2021, more than 600 companies and organizations
signed the ‘Neptune Declaration on Seafarer Wellbeing and Crew Change’ (Global Maritime
Forum, 2021a).4 The declaration recognizes their shared responsibility to resolve the crew change crisis
and calls for the implementation of the industry protocols. For this purpose, it defines four main actions:
recognize seafarers as key workers and give them priority access to COVID-19 vaccines; establish
and implement gold-standard health protocols based on existing best practice; increase collaboration
between ship operators and charterers to facilitate crew changes; and ensure air connectivity between
key maritime hubs for seafarers. Subsequently, the signatories developed a set of best practices that
serve as a framework for charterers to facilitate crew changes and work with ship owners to minimize
the disruptions to operations (Global Maritime Forum, 2021b). In addition, they developed a Neptune
Declaration Crew Change Indicator which aggregates data from 10 leading ship managers covering about
90,000 seafarers, to estimate the number affected by the crisis (Global Maritime Forum, 2021c).5 At
the peak of the crisis, more than 400,000 crew were trapped on board their ships. As of March 2021,
around 200,000 seafarers remained on board commercial vessels beyond the expiry of their contracts
(IMO, 2021b, Aljazeera, 2021).
In March 2021, IMO, ICAO, ILO, WHO and IOM, issued a joint statement on priority vaccination of seafarers
and aircrews (IMO, 2021c, IMO, 2021d; ILO, 2021a). Around that time, there were other important
documents published, including an industry paper ‘COVID-19: Legal, liability and insurance Issues arising
from vaccination of seafarers’ (ICS et al, 2021a), and a ‘Practical guide on vaccination for seafarers and
shipowners’ (ICS et al, 2021b). A further publication by the ICS in May 2021 was ‘Coronavirus (COVID-19):
Roadmap for vaccination of international seafarers’ (ICS et al, 2021c).
The ILO has a Special Tripartite Committee established under the 2006 Maritime Labour Convention
(MLC). In April 2021, the Committee adopted a ‘Resolution concerning the implementation and practical
application of the MLC, 2006, during the COVID-19 pandemic’ which called on Members to designate
and treat seafarers as key workers, and take other necessary steps to ensure their rights (ILO, 2021b).
This would mean providing them with access to COVID-19 vaccination at the earliest opportunity and
promoting the mutual acceptance of vaccine certificates. The Committee also adopted a ‘Resolution
concerning COVID-19 vaccination for seafarers’ (ILO, 2021c), and recommendations concerning the
review of maritime-related instruments (ILO, 2021d). In addition, the ILO, following formal requests from
shipowner and seafarer organizations, has intervened with member States that have ratified MLC 2006, to
remind them of their obligations, notably the obligation of port States to grant access to seafarers in need
of medical care in foreign ports (ILO, 2021e).
In May 2021, the IMO Maritime Safety Committee adopted Resolution MSC.490 (103): ‘Recommended
action to prioritize COVID-19 vaccination of seafarers’ (IMO, 2021e), recommending that member States
and relevant national authorities prioritize their seafarers, as far as practicable, in their national COVID-19
vaccination programmes, taking into account the WHO SAGE Roadmap (WHO, 2020b). And, while
bearing in mind their national vaccines supplies, they should also consider extending COVID-19 vaccines
to seafarers of other nationalities.
Seafarers should also be designated as “key workers” and since they frequently travel across borders
member States should consider exempting them from requiring proof of COVID-19 vaccination as a
condition for entry. In addition, the 109th Session of the International Labour Conference in June 2021
4
Signed by more than 800 companies and organizations, as of June 2021.
5
Anglo- Eastern, Bernhard Schulte, Columbia Shipmanagement, Fleet Management (FLEET), OSM, Synergy Marine,
Thome, V.Group, Wallem, and Wilhelmsen Ship Management.
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5. The COVID-19 seafarer crisis
adopted a ‘Global call to action for a human-centred COVID-19 recovery’ which prioritizes the creation of
decent jobs for all and addresses the inequalities caused by the crisis (ILO, 2021f; ILO, 2021g).
According to IMO, as of the end of June 2021, 60 member States and two associate members had
signed on to designate seafarers as key workers (IMO, 2021f). However, despite a gradual easing, many
countries still maintain restrictions on crew changes based on nationality or travel history. Problems are
also being created in certain contracts of carriage, preventing crew changes while the charterer’s cargo is
onboard and not allowing the ship to deviate to ports where crew changes could take place (ILO, 2021h;
IMO, 2020d). Seafarers also have problems in obtaining visas or travel permits to transit countries.
Despite the above efforts, the crew-change crisis appears to be getting worse. The latest Neptune
Declaration Crew Change Indicator published in July 2021 shows that the number of seafarers on board
beyond the expiry of their contracts continued to rise in June 2021, as did the number of seafarers on
board for over 11 months (table 5.1) (Global Maritime Forum, 2021d). Since the launch of the Indicator in
May 2021, the proportion of seafarers on board vessels beyond the expiry of their contract had increased
from 5.8 to 8.8 per cent – an increase of over 50 per cent. The number of seafarers on board for over
11 months had increased from 0.4 to 1 per cent – an increase of 150 per cent. According to the MLC 2006,
the default maximum period of service on board, following which a seafarer is entitled to repatriation, is
11 months (Regulation 2.5 and Regulation 2.4). In July 2021, the International Chamber of Shipping
estimated that, the number of seafarers remaining on board beyond the expiry of their contract, was
around 250,000.
As part of the reporting for the Neptune Declaration Crew Change Indicator, contributing ship managers
also highlighted the following key developments: “Continual high infection rates and subsequent
domestic lockdowns are still challenging crew changes and causing disruption to crew movements; a
decrease of daily inbound flights to the Philippines as well as the travel ban announced by the Philippine
Government for seafarers traveling from United Arab Emirates, Oman, Nepal, Bangladesh, Sri Lanka,
Pakistan are causing a general disruption to crew movements; travel restrictions continue to prevent
seafarers from going back home and many flights have been cancelled; and leading maritime crew
nations continue to have low vaccination rates and seafarers continue to have limited vaccine access.”6
(see also box 5.1).
Crew changes and repatriation of seafarers thus still entail serious logistical challenges. Moreover, seafarer
access to medical care and priority vaccination remains inadequate, with important repercussions for their
health and safety, as well as for public health (DevPolicy, 2021).
In June 2021, it was reported that a cargo ship’s captain, who developed COVID-19 symptoms shortly
after the vessel set sail, died on board after 11 days (CNN, 2021). Successive ports refused to allow the
vessel to call, and no medical evacuation measures were taken. For six weeks, despite repeated pleas for
assistance, the ship was stranded offshore, unable to find a port that would take the corpse. As a result,
the crew was stuck at sea for weeks, with a potential COVID-19 outbreak on its hands.
This state of affairs is clearly unacceptable. Seafarers should not just be designated as key workers and
vaccinated but also provided with speedy and effective emergency medical assistance in the event of a
COVID-19 outbreak at sea.
It will also be important to keep abreast of the latest guidance, which should be updated in line with
the latest scientific insights on transmission pathways, variants, vaccine efficacy, and related risks.
6
According to ICS, informal industry survey data about vaccinations by nationality of seafarers suggests that, with some
notable exceptions, only a small proportion of the world’s seafarers has been currently vaccinated.
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The latest industry guidance for ship-operators (ICS et al., 2021d), draws on sector-specific WHO
guidance published in August 2020 (WHO, 2020a).7 A good model is that of Belgium which in July 2021,
started a vaccination programme for all seafarers arriving in a Belgian port, regardless of their nationality
(Safety4Sea, 2021). Other countries have seafarer vaccination programmes, including Australia, Cyprus,
Germany, the Netherlands, and the United States. In India the National Union of Seafarers has started a
programme to offer 5,000 doses to seafarers and their families (TradeWinds, 2021).
Addressing the complex issues arising in the context of facilitating global trade in times of a pandemic
while protecting the health of seafarers and the public at large will require the continued engagement of all
stakeholders, including in the negotiations of legal instruments, guidelines and recommendations under
the auspices of UN bodies, including ILO, IMO, and UNCTAD, and in respect of relevant national and local
implementation. Reflecting the continued need to raise awareness and alleviate the plight of seafarers,
while recognizing their vital role in world trade, it is worth noting that “Seafarers: at the core of shipping’s
future” was selected as the World Maritime theme for 2021.8
According to the BIMCO/ICS Seafarer Workforce Report 2021 (BIMCO/ICS 2021), in 2021 around the
world there were 1,892,720 seafarers, of whom 857,540 were officers and 1,035,180 were ratings – skilled
seafarers who carry out support work for officers. The largest supplier for both officers and ratings was
the Philippines followed by the Russian Federation, Indonesia, China, and India (table 5.2). Together, these
countries supplied 44 per cent of the global seafarer workforce. These numbers are growing.
7
The industry guidance also refers to non-sector specific guidance for the general public (WHO, 2020c).
8
https://www.imo.org/en/MediaCentre/PressBriefings/pages/DOTS-2021.aspx.
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In February 2021, ILO, through a revised information note, published guidance, on how best to address
the complexities of the current crisis in light of the provisions of MLC, 2006. This was updated to reflect the
observations of the ILO Committee of Experts on the Application of Conventions and recommendations
(ILO, 2021j), and also made reference to the MLC, 2006 and previous work of ILO bodies12, as well as to
recommendations from the IMO and WHO, and related work by the ICS and the ITF.
The Committee advises that the notion of ‘force majeure’, i.e., unforeseen or unforeseeable circumstances
making it impossible to comply with the MLC 2006, may no longer be invoked from the moment that options
are available to comply with the provisions of the Convention, although more difficult or cumbersome, and
urged ratifying States which have not yet done so, to adopt all necessary measures without delay to
restore the protection of seafarers’ rights and comply to the fullest extent with their obligations under the
MLC 2006.
The note urges all ratifying States to:
• Adopt the necessary measures or reinforce existing ones without delay to ensure that, in no case,
are seafarers forced to continue working on extended contractual arrangements without their
formal, free, and informed consent.
• Recognize seafarers as key workers without delay and to draw in practice the consequences of
such qualification, in order to restore the respect of their rights as provided for in the MLC, 2006.
• Adopt necessary measures, in consultation with relevant seafarers’ and shipowners’ organizations,
to further enhance cooperation with each other to ensure the effective implementation and
enforcement of the Convention, in particular during the COVID-19 pandemic.
Flag States are urged to ensure that:
• The ships that fly their flags fully comply with the provisions of the Convention and adopt the
necessary measures and/or reinforce the existing ones without delay, including through more
frequent inspections, if necessary.
• Seafarers on ships that fly their flags are covered by adequate measures for the protection of their
health and have access to prompt and adequate medical care whilst working on board, including
access to vaccination (Regulation 4.1).
• Seafarers are provided with occupational health protection and live, work and train on board ship in
a safe and hygienic environment (Regulation 4.3).
• The prohibition to forgo minimum annual leave with pay is strictly enforced, with the limited exceptions
authorized by the competent authority (Regulation 2.4 and Standard A2.4, paragraph 3).
• Seafarers are repatriated at no cost to themselves in the circumstances specified in the Convention,
with strict respect of the default 11 months maximum period of service on board derived from the
provisions of the Convention (Regulation 2.5 and Regulation 2.4).
• Ships that fly their flag have sufficient of seafarers employed on board to ensure that ships are operated
safely, efficiently and with due regard to security under all conditions, taking into account concerns
about seafarer fatigue and the particular nature and conditions of the voyage (Regulation 2.7).
• No fees or other charges for seafarer recruitment or placement, including the cost of any quarantine
obligations before joining the ship, are borne directly or indirectly, in whole or in part, by the seafarer,
other than the cost authorized under Standard A1.4, paragraph 5.
• Seafarers are granted shore leave for their health and well-being and consistent with the operational
requirement of their positions, subject to the strict respect of any public health measures applicable
to the local population.
Port States are urged to:
• Ensure that seafarers on board ships in their territory who are in need of immediate medical care,
are given access to medical facilities on shore (Regulation 4.1).
• Facilitate the repatriation of seafarers serving on ships which call at their ports or pass through their
territorial or internal waters (Standard A2.5.1, paragraph 7).
12
Including the CEACR and the Special Tripartite Committee of MLC 2006.
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5. The COVID-19 seafarer crisis
• Allow and facilitate the replacement of seafarers who have disembarked and consequently ensure
the safe manning of ships, by providing an expeditious and non-discriminatory treatment of new crew
members who enter their territory exclusively to join their ships (Standard A2.5.1, paragraph 7).
Labour-supplying States which have not yet done so, are called upon to:
• adopt the necessary and immediate measures to ensure that the required facilities are put in place
in relation to transport, testing and quarantine of seafarers.
• While encouraging a pragmatic approach regarding certificates in respect of training and
qualifications since the beginning of the pandemic, all ratifying States are urgently called upon
to adopt all necessary measures without delay to restore the protection of seafarers’ rights and
comply, to the fullest extent, with their obligations under the MLC 2006.
• With respect to maritime labour certificates and inspections, while recognizing challenges since
the outbreak of COVID-19, in respect of conducting the inspections required in accordance with
MLC 2006, all ratifying countries with responsibilities as flag States and port States are urged to
adopt the necessary measures without delay, to ensure compliance with the Convention.
In addition, the guidance notes that the measures adopted to contain the pandemic are creating additional
challenges in resolving the cases of abandonment that occurred before the outbreak of COVID-19.
The IMO/ILO database on reported incidents of abandonment of seafarers, shows a dramatic increase in
cases of abandonment in the second part of 2020, with some of those cases linked to COVID-19-related
measures.13 It was recalled that, even in the context of the COVID-19 pandemic, flag States, port
States and labour-supplying States remain bound by the requirements concerning repatriation set out in
Regulation 2.5 of the MLC 2006, and the relevant provisions of the Code of the Convention.
Member States must undertake all necessary action to promptly resolve situations of abandonment
and ensure that affected seafarers are repatriated as soon as possible and receive the payment of
outstanding wages, in accordance with the relevant provisions of the MLC 2006 (ILO, 2021j). According
to ILO, as of mid-July 2021, 60 cases had been reported for 2021, which, if that rate continued,
would surpass the number of cases in 2020. Also, resolution of a number of abandonment cases had
been delayed due to the pandemic (e.g., not being able to repatriate seafarers due to restrictions on
disembarkation and travel).
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5. The COVID-19 seafarer crisis
• 2009 amendments to the FAL Convention19 – These entered into force on 15 May 2010 and include
changes related to the contents and purpose of documents: “A passport or an identity document
issued in accordance with relevant ILO conventions, or else a valid and duly recognized seafarer’s
identity document, shall be the basic document providing public authorities with information relating
to the individual member of the crew on arrival or departure of a ship.”
• 2016 amendments to the FAL Convention20 – These entered into force on 1 January 2018 and
provide for additional guarantees. Any discrimination is prohibited, and shore leave should be
granted to crew members, irrespective of the ship’s flag State. Since 2019, ships and ports have
had to exchange FAL data electronically and are encouraged to use a “single window”, in which
all the many agencies and authorities exchange data via a single point of contact. Following the
expected adoption of further amendments in 2022, and their subsequent entry into force, the single
window could become obligatory from January 2024.
19
https://www.imo.org/fr/MediaCentre/MeetingSummaries/Pages/FAL-35th-Session.aspx.
20
https://www.imo.org/fr/MediaCentre/MeetingSummaries/Pages/FAL-40th-session.aspx.
21
https://www.imo.org/en/OurWork/Facilitation/Pages/IMOCompendium.aspx.
22
https://wwwcdn.imo.org/localresources/en/OurWork/Facilitation/Facilitation/FAL.5-CIRC.42-REV.1.pdf.
23
https://asycuda.org/en/. Also see Chapter 6, part on trade facilitation.
24
For further information on Single Windows, see Chapter 5 of the Review of Maritime Transport 2021. Also see Premti A.,
Asariotis R., 2021.
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• International legal framework – States and other relevant stakeholders should, in consultations and
meetings on seafarers’ issues at ILO and IMO, keep under review the relevant legal framework and
ensure that international obligations are respected and implemented.
• Maritime single windows – Port community systems should implement the Single Window concept,
similarly to the customs-centric Single Window powered by ASYCUDA, to cover all the information
and formalities resulting from FAL and other relevant instruments.
• Information exchange – Relevant public and private sector stakeholders should continue their regular
exchange of views and best practices on seafarers’ situation and needs, and lessons learned,
including from the COVID-19 pandemic, and promote further harmonization and standardization.
• Outbreaks and emergencies at sea – In line with developing scientific insights, governments,
international organizations and all stakeholders should regularly update specific guidance
on measures to prevent and deal with COVID-19 and other outbreaks at sea and ensure that
mechanisms are in place to reduce, and respond to medical emergencies at sea.
Public and private stakeholders must continue to work together to implement relevant labour standards
and address health, safety, security, welfare, and other challenges faced by seafarers. All should be
working to protect seafarers’ human rights and advance the objectives of SDG 8 of decent work and
economic growth for sustainable development.
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REFERENCES
Aljazeera (2021). Abandoned: The seafarers stuck at sea for two years. 6 July. Available at
https://www.aljazeera.com/features/2021/7/6/abandoned-the-seafarers-stuck-onboard-for-two-
years.
Bangko Sentral ng Pilipinas (2021). Statistics. Overseas Filipinos’ Cash Remittances. Available at
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Global Maritime Forum (2021a). The Neptune Declaration on Seafarer Wellbeing and Crew Change.
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Seafarer-Wellbeing-and-Crew-Change.pdf.
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Indicator-July-2021.pdf.
ICS et al (2021a). Coronavirus (COVID-19): Legal, Liability and Insurance Issues arising from Vaccination of
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ICS et al (2021b). Coronavirus (COVID-19) Vaccination for Seafarers and Shipping Companies: A
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ICS et al (2021c). Coronavirus (COVID-19): Roadmap for Vaccination of International Seafarers. May.
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ICS et al (2021d). Coronavirus (COVID-19): Guidance for Ship Operators for the Protection of the Health of
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meetingdocument/wcms_760649.pdf.
ILO (2020c). COVID-19 and the world of work: Impact and policy responses 18 March. Available at
https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/briefingnote/
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ILO (2020d). New Statement of the Officers of the STC 1 on the coronavirus disease (COVID-19). 1
October. Available at https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---normes/documents/
statement/wcms_756782.pdf.
ILO (2021a). Seafarers and aircrew need priority COVID-19 vaccination. 26 March. Available at
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ILO (2021b). Resolution concerning the implementation and practical application of the MLC, 2006 during
the COVID-19 pandemic. Available at https://www.ilo.org/wcmsp5/groups/public/@ed_norm/@
normes/documents/genericdocument/wcms_782881.pdf.
ILO (2021c). Resolution concerning COVID-19 vaccination for seafarers. Available at https://www.ilo.org/
wcmsp5/groups/public/@ed_norm/@normes/documents/genericdocument/wcms_782880.pdf.
ILO (2021d). Recommendations concerning the review of maritime-related instruments. Available at
https://www.ilo.org/wcmsp5/groups/public/@ed_norm/@normes/documents/genericdocument/
wcms_783227.pdf.
ILO (2021e). Background paper for discussion. Fourth meeting of the Special Tripartite Committee
established under Article XIII of the Maritime Labour Convention, 2006, as amended – Part I (Geneva,
19–23 April 2021). Available at https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---normes/
documents/genericdocument/wcms_774787.pdf.
ILO (2021f). Resolution concerning a global call to action for a human-centred recovery from the
COVID-19 crisis that is inclusive, sustainable and resilient. 17 June. Available at https://www.ilo.org/
ilc/ILCSessions/109/reports/texts-adopted/WCMS_806092/lang--en/index.htm.
ILO (2021g). Work in the time of COVID Report of the Director-General International Labour Conference
109th Session, 2021. Available at https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/
documents/meetingdocument/wcms_793265.pdf.
ILO (2021h). Statement of the Officers of the STC on the coronavirus disease (COVID-19) regarding
increased collaboration between shipowners and charterers to facilitate crew changes. 15 December.
Available at https://www.ilo.org/global/standards/maritime-labour-convention/special-tripartite-
committee/WCMS_764724/lang--en/index.htm.
ILO (2021i). General observation on matters arising from the application of the Maritime Labour Convention,
2006, as amended (MLC, 2006) during the COVID-19 pandemic. Available at https://www.ilo.org/
wcmsp5/groups/public/---ed_norm/---normes/documents/publication/wcms_764384.pdf.
ILO (2021j). Information note on maritime labour issues and coronavirus (COVID-19). Revised version
3.0. 3 February. Available at https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---normes/
documents/genericdocument/wcms_741024.pdf.
IMO (2020a). Coronavirus (COVID-19) – Joint Statement calling on all Governments to immediately
recognize seafarers as key workers, and to take swift and effective action to eliminate obstacles to
crew changes, so as to address the humanitarian crisis faced by the shipping sector, ensure maritime
safety and facilitate economic recovery from the COVID-19 pandemic. Circular Letter No.4204/Add.30.
11 September. Available at https://wwwcdn.imo.org/localresources/en/MediaCentre/HotTopics/
Documents/COVID%20CL%204204%20adds/Circular%20Letter%20No.4204Add.30%20Joint%20
Statement%20Seafarers.pdf.
IMO (2020b). Coronavirus (COVID-19) – Outcome of the International Maritime Virtual Summit on Crew
Changes organized by the United Kingdom. Circular Letter No.4204/Add.24. 13 July. Available at
https://wwwcdn.imo.org/localresources/en/MediaCentre/HotTopics/Documents/COVID%20CL%20
4204%20adds/Circular%20Letter%20No.4204-Add.24%20-%20Coronavirus%20(Covid-19)%20
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-%20Outcome%20Of%20The%20International%20MaritimeVirtual%20Summit%20On%20Crew-
%20Change.pdf.
IMO (2020c). Recommended action to facilitate ship crew change, access to medical care and
seafarer travel during the COVID-19 pandemic. Resolution MSC.473. 21 September. Available at
https://www.intercargo.org/wp-content/uploads/2020/09/Resolution-MSC.473ES.2-on-Crew-
Change.pdf.
IMO (2020d). Coronavirus (COVID-19) – “No crew change” clauses in charterparties. Circular Letter
No.4204/Add.36/Rev.1. 23 December. Available at https://wwwcdn.imo.org/localresources/en/
MediaCentre/HotTopics/Documents/COVID%20CL%204204%20adds/CL.4204-Add.36%20no%20
crew%20change%20clause.pdf.
IMO (2021a). Industry Recommended Framework of Protocols for ensuring safe ship crew changes and
travel during the Coronavirus (COVID-19) pandemic. MSC.1/Circ.1636/Rev.1. 22 April. Available at
https://wwwcdn.imo.org/localresources/en/MediaCentre/HotTopics/Documents/MSC%201636%20
protocols/MSC.1-Circ.1636%20-%20Industry%20Recommended%20Framework%20Of%20
Protocols%20For%20Ensuring%20Safe%20Ship%20Crew%20Changes%20And%20Travel.pdf.
IMO (2021b). COVID-19 crew change crisis still a challenge – IMO Secretary-General. 19 March. Available
at https://www.imo.org/en/MediaCentre/PressBriefings/pages/Crew-change-COVID-19.aspx.
IMO (2021c). Coronavirus (COVID-19) – Joint Statement calling on all Governments to prioritize
COVID-19 vaccination for seafarers and aircrew. Circular Letter No.4204/Add.38. 25 March. Available
at https://wwwcdn.imo.org/localresources/en/MediaCentre/Documents/Circular%20Letter%20
No.4204-Add.38%20-%20Coronavirus%20(Covid-19)%20-%20Joint%20Statement%20Calling%20
On%20All%20GovernmentsTo%20Prioritize%20Covid-19...%20(Secretariat).pdf.
IMO (2021d). Seafarers and aircrew need priority COVID-19 vaccination. 26 March. Available at
https://www.imo.org/en/MediaCentre/PressBriefings/pages/vaccination-UN-joint-statement.aspx.
IMO (2021e). Report of the Maritime Safety Committee on its 103rd session. MSC 103/21/Add.1, Annex 15.
14 June.
IMO (2021f). Coronavirus (COVID-19) – Designation of seafarers as key workers. Circular Letter No.4204/
Add.35/Rev.7 20 May. Available at https://wwwcdn.imo.org/localresources/en/MediaCentre/
HotTopics/Documents/COVID%20CL%204204%20adds/Circular%20Letter%20No.4204-
Add.35%20-%20Coronavirus%20%28Covid-19%29%20-%20Designation%20Of%20Seafarers%20
As%20Key%20Workers.pdf.
INTERTANKO (2020). Outbreak Management Plan: COVID-19 (version 3). September. Available at
https://www.intertanko.com/info-centre/coronavirus-resources.
ITF (2020). ITF and JNG Joint Statement: On Seafarers’ Rights and the Present Crew Change Crisis. 5
October. Available at https://www.itfglobal.org/en/news/itf-and-jng-joint-statement-seafarers-rights-
and-present-crew-change-crisis.
Maritime Industry Authority (2020). A Letter to All Filipino Seafarers Around the World. 13 April. Available
at https://marina.gov.ph/2020/04/13/a-letter-to-all-filipino-seafarers-around-the-world.
OHCHR (2015). OHCHR, 2015, Human Rights in the 2030 Agenda for Sustainable Development. Available
at http://www.ohchr.org/Documents/Issues/MDGs/Post2015/HRAndPost2015.pdf.
Philippine Statistics Authority. Available at https://psa.gov.ph/national-accounts/base-2018/data-series.
Premti A, Asariotis R (2021). Facilitating crew changes and repatriation of seafarers during the COVID-19
pandemic and beyond. 2 March. Available at https://unctad.org/news/facilitating-crew-changes-and-
repatriation-seafarers-during-covid-19-pandemic-and-beyond.
Safety4Sea (2021). Belgium vaccinates foreign seafarers onboard ships. 27 July. Available at
https://safety4sea.com/belgium-vaccinates-foreign-seafarers-onboard-ships/.
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Administration. Available at https://www.poea.gov.ph/ofwstat/ofwstat.html.
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at https://www.tradewindsnews.com/opinion/lack-of-international-vaccination-strategy-is-failing-
seafarers/2-1-1032040.
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a tool to support human rights due diligence. Available at https://ungc-communications-assets.
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system/files/official-document/rmt2020_en.pdf.
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25 March. Available at https://unctad.org/news/coronavirus-lets-keep-ships-moving-ports-open-and-
cross-border-trade-flowing.
UNCTAD (2020c). COVID-19: A 10-point action plan to strengthen international trade and transport
facilitation in times of pandemic – UNCTAD Policy Brief No. 79. Available at https://unctad.org/
webflyer/covid-19-10-point-action-plan-strengthen-international-trade-and-transport-facilitation.
UNCTAD (2020d). UNCTAD-IMO Joint Statement in support of keeping ships moving, ports open and
cross-border trade flowing during the COVID-19 pandemic. 8 June. Available at https://unctad.org/
system/files/official-document/osg_2020-06-08_stat01_en.pdf.
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COVID-19. Available at https://tft.unctad.org/ports-covid-19/.
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persons. Available at https://etradeforall.org/news/unctad-repositories-of-measures-on-cross-border-
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passenger_ships-2020.1.
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Limited Supply. 13 November. Available at https://www.who.int/publications/i/item/who-sage-
roadmap-for-prioritizing-uses-of-covid-19-vaccines-in-the-context-of-limited-supply.
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1 March. Available at https://www.who.int/publications/i/item/9789240021280.
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iris/handle/10665/342212.
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This chapter summarizes important recent international
legal and regulatory developments. It also covers maritime
trade and transport facilitation issues, particularly those
related to COVID-19 which has created many problems
for clearing goods through ports, but also created
opportunities for new and smart solutions.
6
online and automated systems that raise concerns about
cybersecurity. However, shipowners and operators can
also take advantage of recently adopted guidelines on how
to maintain cybersecurity in their companies and onboard
ships, taking into account the requirements of IMO, and other
relevant guidelines.
1
For further information, and an overview of IMO, ISO, EU, US and industry cybersecurity guidance, see UNCTAD, 2020a,
chapter 5. See also IMO, 2021a.
2
Other available guidelines include the Digital Container Shipping Association’s Implementation Guide for Cyber Security
on Vessels v1.0 (DCSA, 2020), based on version 3 of the industry guidelines (BIMCO et al., 2018), and the US NIST
framework (NIST, 2018). While their target audience is the container industry, other segments of shipping may also find
them useful. In addition, the International Association for Classification Societies (IACS) has issued a recommendation
(IACS 2020), which applies to newbuild ships only, but can also serve as guidance for existing ships.
3
https://www.jus.uio.no/lm/sea.carriage.hague.visby.rules.1968/portrait.pdf.
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risks and reduce vulnerabilities through safety management systems, in accordance with IMO and industry
guidance.
For ports, BIMCO and other maritime NGOs have invited public and private stakeholders to help create
global digital ISO standards to facilitate the digital exchange of data, particularly in light of the new urgency
brought about by the COVID-19 pandemic and increasing demand (BIMCO, 2021).
4
The outcome of the MSC’s regulatory scoping exercise, as approved by the Committee, including the full analysis of
treaties, can be found as an annex to the report on its 103rd session (IMO, 2021b).
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For this purpose, operators can use a new Energy Efficiency Existing Ship Index (EEXI), along with a new
operational carbon intensity indicator (CII) – a dual-track approach that will enable them to address both
technical and operational measures. The EEXI measures the energy efficiency of the ship compared to a
baseline and should be calculated for ships of 400 GT and above, in accordance with values set for ship
types and size categories. Ships are required to reduce the EEXI by a specified percentage of the baseline.
Ships of 5,000 GT are already required to collect data on fuel oil consumption. Now they must also bring
their operational carbon intensity within a specific level, document and verify their CII against the required
value, and record this in the Ship Energy Efficiency Management Plan (SEEMP). This should result in
a performance rating of A, B, C, D or E – corresponding to major superior, minor superior, moderate,
minor inferior, or inferior. A ship rated D for three consecutive years, or E, would have to submit a plan for
corrective action, to show how the required rating (C or above) would be achieved. Administrations, port
authorities and other stakeholders are encouraged to provide incentives to ships rated A or B.
These amendments are expected to enter into force on 1 November 2022, with the requirements for
EEXI and CII certification coming into effect from 1 January 2023. This will allow the first annual reporting
on carbon intensity to be completed in 2023, with the first rating given in 2024. For its part, the IMO is
to review the effectiveness of the implementation by 1 January 2026 and, if necessary, adopt further
amendments. To support the implementation, the MEPC has also adopted related guidelines.
The GHG reduction candidate measures considered at IMO need to undergo an initial assessment of their
impact on States, based on the procedure adopted in 2019 (MEPC.1/Circ.885). The procedure also states
that proposed measures, including the latest measures adopted, need to undergo a comprehensive impact
assessment before adoption if required by the Committee. To support this process, UNCTAD has been
collaborating with the IMO on an expert review of the impact assessments submitted to ISWG-GHG 7, as
well as the final comprehensive impact assessment of the short-term combined measures submitted to
the 76th session of MEPC (UNCTAD, 2021a; see also chapters 2 and 4 for a discussion of the outcomes).
The 75th and 76th sessions of the MEPC also discussed an industry-led proposal for a non-governmental
International Maritime Research and Development Board (IMRB), funded by a mandatory $2 per-tonne
levy on ship fuel. The MEPC also considered mid- and long-term measures, including market-based
measures, and a work plan for further cutting GHG emissions from shipping, in line with the initial IMO
strategy (IMO, 2021d). Further consideration of the proposals should take place during ISWG-GHG 10 in
October 2021.
5
See https://unfccc.int/climate-action/marrakech-partnership/reporting-and-tracking/climate_action_pathways.
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and 2040) (UNFCCC, 2021a and 2021b). By 2025, all new transport infrastructure, systems and, where
necessary vehicles, should be climate-resilient to at least 2050; by 2030, that should extend to all
critical transport infrastructure and systems. By 2040, all critical infrastructure and systems should be
climate-resilient to at least 2100 (UNFCCC, 2021b).
Translating this timely ambition into action will require a major acceleration of efforts. For its part, in 2021
the EU issued its Climate Change Adaptation Strategy, which aims for a climate-resilient EU by 2050 – “by
making adaptation smarter, more systemic, swifter, and by stepping up international action” (European
Commission, 2021). The EU has also adopted a new Climate Law, which entered into force on 29 July 2021
(European Union, 2021). This aims for EU climate neutrality by 2050 and by 2030 to reduce domestic net
greenhouse gas emissions by at least 55 per cent of their 1990 levels. In addition, the new law envisages
“continuous progress in enhancing adaptive capacity, strengthening resilience and reducing vulnerability
to climate change in accordance with Article 7 of the Paris Agreement” and related stocktaking, starting
in 2023.
Guidance for action has also been produced by the World Association for Waterborne Transport
Infrastructure (PIANC). In 2020 PIANC issued a revised version of ‘Climate Change Adaptation Planning
for Ports and Inland Waterways’ (PIANC 2020). This covers priority actions such as: inspection and
maintenance; monitoring systems and effective data management; and risk assessments, contingency
plans and warning systems. It also focuses on flexible and adaptive infrastructure, systems and operations
and better resilience through engineered redundancy.
Also worth noting is the new ISO standard ISO 14091:2021 – Adaptation to climate change-Guidelines
on vulnerability, impacts and risk assessment (ISO, 2021). This covers vulnerability to climate change,
and highlights the importance of risk assessments and of monitoring and evaluating for any organization,
regardless of size, type, or nature.
In 2020 during the COVID-19 pandemic, there was a significant fall in investment in transport
infrastructure.6 However, major scaling up of investment and capacity building for developing countries
will be critical to ‘building back better’ after the pandemic. The OECD estimates that meeting the SDGs
by 2030 will require $6.9 trillion in infrastructure investment annually, (OECD, 2017). At a recent UNCTAD
dialogue, SIDS representatives highlighted the urgent need for better availability/access to green and
blue infrastructure financing (UNCTAD, 2021b and c). This could bring enormous economic benefits: the
World Bank estimates that investing in resilient infrastructure in developing countries could bring returns
of $4.2 trillion over the lifetime of new infrastructure – a $4 benefit for each dollar invested (Hallegatte S.
et al., 2019).
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6. Legal and regulatory developments and the facilitation of maritime trade
procedures, and consequent related amendments to the International Air Pollution Prevention (IAPP)
certificate.
From 1 January 2020, Flag and Port State controls have had to make sure that ships comply with the
0.5 per cent sulphur limit. To do so, shipowners and charterers can adopt three different approaches:
a) Use a compliant fuel which is low enough in sulphur such as VLSFO or MGO;
b) Use alternative fuels such as liquefied natural gas (LNG), methanol, liquefied petroleum gas (LPG),
hydrogen fuel cells, or biofuels which emit very small amounts of SOx; or
c) Use equivalent methods, including fitting or retro-fitting their ships with exhaust gas cleaning
systems, also known as scrubbers. Scrubbers may be open loop –discharging wash water into the
sea – or closed loop discharge residues to adequate reception facilities ashore.
During 2020 and the first half of 2021, implementation, primarily with the use of VLSFO, was relatively
smooth, and compliant fuel oil was widely available globally (IMO, 2021e). There was some disruption by
COVID-19, and several more ports and countries banned open-loop scrubber wash water discharge.
Global enforcement of the new regulation was facilitated, however, by a ban on the carriage of
non-compliant fuel.
Liability for compliance mainly rests with shipowners – who typically supply the fuel. In the case of
charterparties, usually voyage charters, the contract may require the shipowner to warrant that the
vessel complies with international rules and regulations. For time charters, on the other hand, it is
the charterers who usually purchase and provide the fuel; therefore contractual provisions may shift
responsibility for compliance with applicable Sulphur Content Requirements to the charterers, so
the liability and the associated risk is divided between them and the shipowners, who warrant that
the vessel itself is compliant. Examples of relevant clauses include the BIMCO’s Marine Fuel Sulphur
Content Clause for Time Charter Parties (BIMCO, 2018), and INTERTANKO’s Bunker Compliance Clause
(INTERTANKO, 2018). In order to increase clarity, contracting parties should consider incorporating such
clauses in charterparties.
Further special regulation has been agreed for the environmental protection of Arctic waters. In June 2021,
the MEPC adopted amendments to MARPOL Annex I that prohibit the use, and carriage for use of heavy
fuel oil by ships in Arctic waters on and after 1 July 2024. Ships that meet certain standards on oil fuel tank
protection would need to comply on and after 1 July 2029.
However, up to 1 July 2029 a Party with a coastline bordering Arctic waters may temporarily waive the
requirements for ships flying its flag and operating in waters that are subject to that Party's sovereignty or
jurisdiction. After that date, exemptions and waivers would no longer apply. Currently, MARPOL Annex I
regulation 43 prohibits the use or carriage of heavy-grade oils on ships in the Antarctic; and under the
Polar Code9 ships are encouraged not to use or carry such oil in the Arctic. The new regulation will help
protect these fragile areas further. However, its impact could be significantly reduced by the waivers and
exemptions for contracting States with a coastline bordering Arctic waters, until 2029.
c) Biofouling
A prominent, but underestimated, source of microplastic pollution is antifouling coatings on ships (Dibke C.
et al., 2021). In June 2021, the MEPC adopted amendments to the IMO Convention for the Control
9
For more information, see UNCTAD, 2015a.
10
https://wwwcdn.imo.org/localresources/en/About/Conventions/StatusOfConventions/StatusOfTreaties.pdf.
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of Harmful Anti-fouling Systems on Ships, 2001 (AFS Convention)11, to prohibit anti-fouling systems
containing cybutryne. This would apply from 1 January 2023 or, for ships already using such a system, at
its next scheduled renewal after 1 January 2023, but no later than 60 months following the last application
to the ship of such an anti-fouling system.12
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6. Legal and regulatory developments and the facilitation of maritime trade
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This would contain the names and contact details of national governmental bodies or authorized/delegated
entities in charge of the registration of ships, as well as other relevant information. The Committee also
approved best practices to combat fraudulent registration and registries of ships, and established an
intersessional correspondence group to consider various proposals in greater detail (IMO, 2019b). This
group, in which UNCTAD participated, has since prepared a draft Resolution on “Encouragement of
Member States and all relevant stakeholders to promote actions for the prevention and suppression of
fraudulent registration and fraudulent registries, and other fraudulent acts in the maritime sector”. This
was finalized by the IMO Legal Committee at its 108th session in July 2021 and submitted to the IMO
Assembly, for consideration in December 2021 (IMO, 2021c). The intersessional group had also proposed
future work on a corresponding IMO study, which was agreed upon by the IMO Legal Committee. It should
be noted that there is already an International Convention on the Registration of Ships, 1986,18 which
provides some safeguards against fraudulent ship registration, and was adopted under the auspices of
UNCTAD, but it has not entered into force.
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Expert Group meetings were held in 2019 and 2020, and in May 2020 their conclusions were presented
to the 53rd annual session of UNCITRAL (UNCITRAL, 2020a). The Commission recognised the value
of electronic transport documents, particularly for the new supply chain and logistics models expected
to develop following the COVID-19 disruption and requested the secretariat to start preparatory work,
in close coordination and cooperation with relevant international organizations, on a new international
instrument on multimodal negotiable transport documents that could be used for contracts not involving
carriage by sea (UNCITRAL, 2020b, para.16(e)).
In February 2021, there was a Third Expert Group Meeting on a ‘New International Instrument on Negotiable
Multimodal Transport Documents’, with the participation of international organizations, including UNCTAD,
as well as practitioners and academia. In April 2021, an open webinar on ‘International experiences with the
dematerialization of negotiable transport documents’ was held (UNCITRAL, 2021a). At its 54th session in
July 2021, UNCITRAL welcomed the preparatory work and confirmed its strong interest in the project. The
Commission agreed that “the primary purpose of a new international instrument should be to ensure legal
recognition of a medium neutral negotiable transport document in different modes of transport and that, for
that purpose, it was desirable to focus first on negotiable transport documents and subsequently consider
whether other types of transport documents accepted by banks for documentary credit should also be
encompassed”. The Commission also agreed on the need for proper coordination and interface with the
liability regimes provided under existing conventions on international carriage of goods by various modes
and invited the secretariat to continue its preparatory work in close coordination with other organizations
currently working on or exploring solutions to enable the use of a negotiable transport document in the rail
plus or other multimodal context, as well as other organizations with relevant expertise, or representing
relevant industries (UNCITRAL, 2021b).
Given the broad substantive scope of the proposed future legal instrument, public and private stakeholders
both in multimodal transport and in all the different modes are encouraged to participate in any related
further work. For small traders in developing countries, a key concern will be adequate liability for cargo
loss or damage. UNCTAD will continue to participate in any related work under the auspices of UNCITRAL.
3. Status of conventions
A number of international conventions in the field of maritime transport have been prepared or adopted
under the auspices of UNCTAD. During the current reporting period, only the status of the Hamburg
Rules changed, with one additional accession (see https://unctad.org/webflyer/review-maritime-
transport-2021). For additional information, see https://unctad.org/ttl/legal. For official status information,
see the United Nations Treaty Collection, available at https://treaties.un.org.
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However, the agreement is not being implemented by all members – only by 71 per cent of developing
countries and by 36 per cent of LDCs. The reality on the ground may even be less positive, as it is not sure
that countries fully comply in practice with their notified implementation schedules.
Trade facilitation makes ports and shipping more efficient. Those developing countries and LDCs that
implement the TFA tend to have a higher turnover of container ships at port. This is evident from the
UNCTAD Liner Shipping Connectivity Index, which shows that 13 per cent of the variance of the time
that container ships spend in port can be statistically explained by differences in TFA implementation
(UNCTAD, 2016).
To help developing countries and LDCs implement the agreement, the TFA provides for Special and
Differential Treatment (SDT) through which those countries can acquire the necessary capacity. To benefit
from SDT, developing countries and LDCs need to define their needs for technical assistance and capacity
building (TACB). As of July 2021, 119 developing and least developed members had notified their intention
to use the SDT provisions.
Recipients of TACB have made progress in implementing TFA commitments. For LDCs that have received
TACB support, OECD indicators and WCO-Time Released Study data reveal substantial reductions
in customs clearance times. The progress is especially evident in transparency on customs rules and
regulations, customs automation, and in the timely release and clearance of goods (OECD/WTO, 2019).
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Public-private dialogue and inter-agency cooperation are often manifested in the port community system
(PCS) as prescribed in TFA Article 8 and Single Window, Article 10.4. The PCS is the electronic exchange
platform that interfaces with existing IT systems within a port environment, including all the stakeholders,
private and public. In the Port of Valencia, Spain the PSC provides for the electronic exchange of supply
chain information for B2B, B2G and G2B. Recently, these systems have started to link up internationally
with port-to-port data exchange– facilitated by the International Port Community Systems Association
Network of Trusted Networks. In addition to pre-arrival and arrival processing this enables greater
transparency in the supply chain through track and trace.
Another critical issue for public-private dialogue is the safety and well-being of workers. Ports and other
actors can for example, cooperate to improve crew changeover processes and ensure standards of
procedure and risk-management protocols at the national level so that imperatives of operational continuity
do not compromise the safety and well-being of workers. This issue has also come to the fore during the
pandemic when seafarers have suffered from blockades on ships for several months and from loss of
employment and were often in desperate conditions.
The benefit of public-private cooperation has been demonstrated in the ‘landlord port’ system. In this
case, border agencies deal with regulatory policies and administer the supply chain while the private
sector oversees the handling and storage of shipments as well as the maintenance of port terminals. This
allows the government to upgrade its systems for customs clearance and other regulatory treatments of
goods while the business sector can improve hard infrastructure, thus boosting the port competitiveness.
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Table 6.1 Key performance indicators of the Kenya Trade Information Portal
Kenya Trade Information Portal (52 trade procedures)
• 44 of 52 procedures have been simplified • 50 steps eliminated • 20 steps now accessible online
1.1 on average
• 66% of all steps are now online
(baseline: 46%)
• 110 hours saved • 53,000 KES saved fees ($480 saved) • 66 documents eliminated
2.5 on average 1,205 KES average reduction ($10.9) 1.5 on average
Another ICT innovation, based on UNCTAD technology, is the Trade Information Portal (TIP). Governments
can use this online portal to document and publicize trade procedures for export, import and transit.
Each TIP offers step-by-step guides to trade-related procedures. The TIP, which is coordinated by the
Secretariat of the National Trade Facilitation Committee, simplifies and streamlines procedures while
increasing transparency of trade information on export, import and transit requirements. In this way
countries can fulfil their obligations in WTO TFA, article 1.2 on information availability through the internet.
Today, 29 TIPs, based on UNCTAD technology, are being implemented globally by UNCTAD and the International
Trade Centre. Results have been very positive. TIPs are most advanced in East Africa, where in Kenya, for
example, greater transparency and simplification of a total of 52 trade procedures so far have reduced the time
spent waiting in the queue, at the counter and in between steps by 110 hours, and the administrative fees for
these 52 procedures by $482, i.e., about $11 per trade procedure on average (table 6.1).
An essential element of measures to improve trade facilitation is digitalization, which is part of a paperless
environment. All trade procedures can then be carried out online, reducing time and cost for the traders and
increasing transparency and market access. These smart solutions also enable better public administration
of trade and, by minimizing the use of paper and carbon-based activities, can reduce CO2 emissions
(Duval, 2021). However, these benefits will only be achieved through sustained intergovernmental and
public-private sector cooperation at all levels (box 6.1).
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F. FAL CONVENTION
The WTO TFA addresses issues in relation to the clearance of goods. The Convention on Facilitation
of International Maritime Traffic (FAL Convention), on the other hand, which is managed by the IMO,
focuses on the formalities and procedures for ships calling in ports, including those related to the arrival
and departure of seafarers. Trade facilitation initiatives are likely to involve both agreements, so careful
coordination and integration will be needed at the national level in order to ensure that regulations and
procedures are aligned.
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In 2021, having learned from the COVID-19 pandemic, Member States are adding a new section addressing
a public health emergencies of international concern (PHEIC) to the FAL Convention. To help sustain global
supply chains during a PHEIC, contracting governments and their relevant public authorities must ensure
that ships and ports remain fully operational. And they should designate port workers and crew members
who are in their territory as key workers or equivalent, regardless of their nationalities or the flag of their ship.
National authorities are also advised not to introduce obstacles to crew movements for repatriation, crew
changes or travel. The new amendments to be adopted in 2022 also encourage governments to disseminate
information about public health matters and the protection measures expected from ship operators.
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21
Grant Agreement #81249048 between GIZ and UNCTAD/ASYCUDA signed in October 2019.
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This project involves the development of ASYHUB Maritime, a standardized data exchange and integration
platform. Currently, the project is in phase two of a three-phase process and is being testing in two pilot
countries. This will be followed by the creation of a virtual community of practice consisting of countries
using ASYCUDA World, to enable its potential replication or upscaling in over 90 countries.
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rising temperatures could be stabilized by deep cuts in emissions of GHGs in which shipping must play its
part. In June 2021, the IMO adopted mandatory regulations that aim to cut the carbon intensity of ships
and their carbon emissions. These include requirements to measure the energy efficiency of all ships and
set the required attainment values. Adaptation remains a particular concern for vulnerable developing
countries, including SIDS.
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Review of Maritime Transport 2021:
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